Go to the flag tab of the prop_physics entity and turn damage off. Or just set it to ignore damage events by setting a really high number for the min damage setting.

I got around this by using the "Minimum Damage to Hurt" property - set this very high, like 10000 or something, meaning if something wishes to damage said prop it will have to hit it for over 10000 damage in one hit.

The blockbullets tool texture does block bullets but not exclusively - essentially the brush covered in the texture acts as a wall only to bullets and nothing else, so standard bullet penetration rules apply to it (which can be found here).