Question: Are they referring to BLAST reference sequences?
Question: If this is not BLAST reference sequences, then how do we point to the NCBI blast reference sequences?
Sure, if those are the sequences you want to taxonomically classify.
No, this is ANY reference database in the appropriate format (see the SILVA and greengenes reference files linked to from here). Note that BLAST is the name of the algorithm used for alignment, and is not the same thing as NCBI-BLAST (a webtool implementation of BLAST). The outputs of this classifier (which performs LCA classification on top of BLAST alignment) is also not the same thing as BLAST or NCBI-BLAST.
You could download the NCBI nt database and use that, provided you get it in the correct format (follow the examples from above).
This is the reference taxonomy; see the SILVA and Greengenes taxonomy files for examples.
There is no example in the docs, but you can find examples on this forum by searching the archive. For example, see here for an example of how to import the reference files and use the classifier: