I am fairly sure one of mine ended up being released on my neighborhood block. There was one more than there were when I went into my house, in any case.
Yes. That's what happens - I think - when you release a chicken / butterfly from your old, bought home: it goes to the housing block.
But now, when releasing them from inside your /home or from the home street, where do they go (I tested: from inside the home doesn't go to home street; I thought to check my "old" residential block too, nada)... staff help us out!