In awk, the blocks you are talking about have the format:

Code:

    pattern { action }

and as you know if the { action } part is missing, it defaults to:

Code:

    pattern { print $0 }

So, the line:

Code:

copy

is a block of its own that could be rewritten as:

Code:

copy {	print
}

(since print with no arguments defaults to print $0). When the variable copy is set to a non-zero, non-empty value, that line causes the current line to be printed. And when copy is an empty string (the default value until it is set to something else) or zero that block is a no-op.
Block (3) turns off copying input lines to the output after the end of a set of <JOB> tags:

Code:

<JOB...>
...
</JOB>

has been conditionally printed.
The line in the code:

Code:

copy

prints everything this script prints except the opening <FOLDER...> tag line that is printed in block (2) the 1st time a job is found that is to be printed in that folder and the </FOLDER> line that is printed in block (4) iff one or more jobs were found to be printed in the preceding folder.