They each nominate two HGs from the OTHER side. Those two sets compete in the battle of the block competition, then the losing pair is nominated.
HOH isn't safe because the other HOH can nominate them. Battle of the Block replaces Have-Not (like the Coach competition did). Whether or not there are still Have-Nots is unknown, they just posted the third bedroom on CBS. It could be a Have-Not room, but they usually don't reveal it.