If it is blocked but then all of its blockers are removed before combat damage is assigned, then it won't be able to deal combat damage and you won't be able to use its ability.

If you choose to use the ability to divide up the damage (and there is at least one point of damage to be assigned), you must choose at least one creature or the defending player, and can't choose more total creatures and players than the amount of damage being assigned (minimum 1 point per player or creature).

You can use the ability to divide damage even if it is not blocked.