We have a similar large window-over-tub situation and chose an inside-mount Roman shade. Obviously that won't work with the depth of your window, but an outside mount should be fine.
You most certainly can get too good of a glimpse through bare glass block, particularly at night when the bathroom is lit from within. It may be a bit blurry, but there is still little left to the imagination. No way would I leave such a window uncovered!
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