The magnetization of luminescent Er3+-doped PbF2 nanoparticles (formula Er0.3Pb0.7F2.3) has been studied. Despite the high concentration of the doping Er3+ ions and relatively large size (8 nm) of these nanoparticles we have found no deviation between field-cooled and zero-field-cooled magnetization curves down to T = 0.35 K, which points out an ultralow blocking temperature for the reversal of magnetization. We also have found strongly deviating magnetization curves M(H/T) for different temperatures T. These results altogether show that the investigated nanoparticles are not superparamagnetic, but rather each Er3+ ion in these nanoparticles is found in a paramagnetic state down to very low temperatures, which implies the breakdown of the Neel-Brown giant spin model in the case of these nanoparticles. Calculations of magnetization within a paramagnetic model of noninteracting Er3+ ions completely support this conclusion. Due to the ultralow blocking temperature, these nanoparticles have a potential for magnetic field-induced nanoscale refrigeration with an option of their optical localization and temperature control.