On a modern phone, none of your personal data will (usually) be stored on the SIM. It's true that technically, a SIM card has the ability to store a limited address book, a small collection of text messages, and some call history, and in the old (pre-smartphone) days, this was super handy when moving to a new device.
Today, I would be shocked (and really annoyed) to discover that a phone was storing any personal information on the SIM, because that would allow someone with physical access to my device to be able to (literally) pull that information out of the phone. I should be able to throw a SIM away when it's no longer in use, without fear of any data leakage.
What a SIM does store is a secret key that uniquely identifies your phone to the cellular network, and that your phone company uses to decide if you should be allowed to connect to their towers, what your phone number is, what services you are allowed to use, and how you should be billed. You can think of the SIM as your phone-company-issued ID card: it identifies you, gives you permission to use the phone network, makes your connection through the air from your phone to the nearest tower private, and nothing else.
With that knowledge, your question can be answered fairly easily.
But when incorrect PUK is entered 10 times, it is no longer possible to unlock it. What happens?
When the PUK is entered incorrectly 10 times, the SIM assumes that someone who shouldn't be holding it is holding it. It disables itself completely. It can never be used to connect to the cellular network again.
So, all you need to do is contact your phone company, tell them what happened, and get a new SIM. They will give you a new SIM, with a new secret key, and mark the old one as dead. Most reputable phone companies won't charge you anything for this, though some will take any excuse to charge you a fee. Since the dead SIM can never be used again, even if someone malicious and skilled were to get their hands on it, it's not useful for any purpose at all, and can't be used to access your information, your account, your phone number, or make calls at your expense.
- Is everything on the SIM card erased or only PUK?
Exactly how the SIM responds to the PUK being entered incorrectly 10 times depends a little on the manufacturer, but basically, you can probably assume that everything on the SIM card is erased. Remember, none of your personal information will be on the SIM unless you intentionally put it there (for example, to move your information to a new phone without using an Apple, Google, or Samsung account, or any other cloud service). If your phone is working the way it was designed, your personal information is safe no matter what happens to your SIM.
If you did put your personal information on the SIM, or you aren't sure, then my advice is simply to cut the card with scissors or melt the card with a lighter before throwing it away. (But don't throw it away before speaking to the phone company; they may want the serial number on the card, or may ask for the card itself to be returned, before issuing you a new one.)
- Is SIM card blocked if user enters incorrect PIN 3 times, then incorrect PUK 10 times when trying to enable PIN SIM card protection.
Actually, the phone company doesn't know if you need to enter the PUK, and doesn't know if you entered it incorrectly 10 times. So, they don't block it, simply because they don't need to; your front door lock doesn't need to know if you lost your front door key, it simply won't let you come inside without it.
If your SIM has PUK-locked and disabled itself, simply tell the phone company, verify that you're really you (either in person by showing ID, or over the phone by proving you are who you say you are as usual), and they'll issue a new SIM for you with the same phone number, account, billing, everything.
- Is it possible to unlock the SIM card?
No. If it were possible for you to unlock it, then it would be possible for someone else to unlock it, and the PUK system is designed to prevent exactly that. But, as said above, there's no need to unlock the SIM, you can just get it replaced by the phone company.
I hope this helps!