They do block Wireguard. They use DPI (Deep Packet Inspection) at the national level (it's as expensive as it sounds). They filter and monitor all traffic. Once you have something as invasive as DPI in place, Wireguard becomes rather easy to detect, because it doesn't hide the fact that you're establishing a tunnel (its purpose is just to obscure the data being tunneled).
According to the specification, a specific sequence of bytes (Handshake Initiation packet) is sent by the "client" to negotiate a connection, and a Handshake Response is sent back by the "server". The handshake packets used to negotiate a connection are basically a recognizable signature of the Wireguard protocol, so if you are able to analyze all outgoing and incoming packets (which DPI enables you to do), you can monitor for these signature packets and block the connection attempt.
There are variants of the Wireguard protocol that can circumvent this method of censorship (Amnezia Wireguard is one example), but they only work as long as they stay under the radar and don't see mass adoption. Their own "signatures" would also just get blocked in that case.
Ultimately, bypassing this level of censorship just isn't something Wireguard was created for. Wireguard assumes you are only concerned with obscuring your traffic, not hiding the fact that you're using a VPN. There are better tools for this job, like this: https://www.v2fly.org/en_US/
Edit: Better link with the language set to English
I've had to bypass DPI several times in the past. V2Ray has never failed me, but I had to set it up myself on my own VPS. It wasn't being offered commercially by any VPN providers back when I needed it. More info here: https://www.v2fly.org/en_US/
Edit: Forgot to mention, for those interested in setting this up an easier option is to let Amnezia VPN set it up for you. It's FOSS, can be found here https://github.com/amnezia-vpn/amnezia-client
You'll need to have your own VPS or home server though, and if you want to use V2Ray at home and do some advanced routing to enable local LAN access for example, then it's better to set things up from scratch than to use Amnezia.