How would one create a pattern with custom blocks

I am not to familiar with blocks in Gutenberg yet, but I have been able to edit the default ones in scripts/editor

I am wondering if there is a Radicle type way or other recommended way to create patterns from blocks.

As radicle is based on/compatible with Sage, this Sage 10 FSE example could be helpful:

Does this work with Radicle theme configuration. I am not sure it meets the requirements in this repo you linked

# Requirements
A patched roots/acorn package is used by the theme as theme runtime dependency (in theme composer.json) which loader preserves the block template paths.
remove_theme_support('block-templates') must be absent, as FSE will not work otherwise (important).
templates/ directory, index.html and theme.json (see the FSE-specific theme files below).

Correct, the patched acorn package is important, then remove_theme_support('block-templates') must be absent and the templates/index.html and theme.json must be present in the theme.

Do I need to add this entire block to the composer.json?

 "repositories": [
    {
      "url": "https://github.com/strarsis/acorn",
      "type": "vcs"
    }
  ],
  "require": {
    "php": "^8.0",
    "roots/acorn": "dev-patch-1"
  },

Yes, or alternatively use this other PR that also fixes the issue but has some improvements:

Or the one from the Sage 10 FSE sample as you posted above:
https://github.com/strarsis/sage10-fse/blob/e7bc7db0bd8b4b8876aca7b521d8c4b970c9b876/composer.json#L41-L50