We, can easily compute this, as to change gravitational potential energy the block neds to cange it’s height from centre of earth. As,

. In this case, the block can’t displace vertically, so potential energy must not change. Where as in specific conditions, it can displace horizontally, upon hit by the bullet, hence kinetic and energy and momentum may not be same, and temperature will definitely change, as frictional force will generate heat.