what is the purpose for Transit Gateway CIDR blocks

Hello.

Select the subnet to link when creating a TransitGateway attachment.
A TransitGateway attachment ENI will be created in the selected subnet, and you will be able to communicate with multiple VPCs etc. via that ENI.
https://docs.aws.amazon.com/vpc/latest/tgw/tgw-vpc-attachments.html#create-vpc-attachment

For Subnet IDs, select one subnet for each Availability Zone to be used by the transit gateway to route traffic. You must select at least one subnet. You can select only one subnet per Availability Zone.

TransitGateway best practices are described in the following documents:
It also describes how to create a subnet.
https://docs.aws.amazon.com/vpc/latest/tgw/tgw-best-design-practices.html

Use a separate subnet for each transit gateway VPC attachment. For each subnet, use a small CIDR, for example /28, so that you have more addresses for EC2 resources. When you use a separate subnet, you can configure the following: