I believe you need to place that parameter on the destination not the source:
msdeploy -Verb:Sync -Source:dbDacFx="Data Source=localhost;Initial Catalog=DevelopmentDB;Integrated Security=True;" -Dest:dbDacFx="Data Source=localhost;Initial Catalog=ProductionDB;Integrated Security=True;",BlockOnPossibleDataLoss="False"
More details here