There are multiple things going on when you look at a light source (or when your eyes are open) over which you have no control.
Firstly, there's the "bleaching" of the light-sensing cells on your retinas. This is the means by which light which enters your eyes is measured; that's actually quite a complex process itself, as is the chemical reaction of those cells, so we won't go into it here - but it has nothing to do with the nervous system and can operate independent of it.
Secondly, there's the reaction of the eyelids and the iris (the colored part of the eye which forms the pupil, which is actually a hole through which light enters the inner eye, where it is detected by the rod and cone cells...no, don't try to put things in there, there's a translucent layer of tissue covering it to prevent that- be glad you're not a cephalopod) which will contract to cover the sensitive inner eye and prevent bright lights from reaching and potentially damaging it. You don't have any real control over that; it's part of the autonomous nervous system (though you are also capable of voluntarily shutting your eyes). Again, this could happen even if the optic nerve were damaged or missing - you don't use your optic nerves to control blinking, but whether it would happen automatically depends on whether your brain is capable of registering pain consciously or otherwise in the eye; that may depend on the extent of the damage to the optic nerve.
"Blind" isn't really a great descriptor here because we don't know what's wrong with Toph's eyes; all blind really means is "you can't fix it with glasses". She may retain a range of visual cues such as light and shade or the ability to perceive shapes and motion, and the cause of her blindness could be almost anything, certainly going beyond the diseases of the eye alone.
Shielding her eyes might well be an automatic procedure despite being blind, and she might well feel pain from bright light.