RF sensing exploits phase-sensitive measurements of stray electromagnetic (EM) fields from wireless devices across various frequency bands to detect EM blockage and to reconstruct and map the surrounding environment in 2D/3D. Although blockage effects caused by objects or human motion are well-studied in ISM bands and frequencies up to 60~GHz, there is a significant lack of research for frequencies above 100~GHz. The paper proposes a unified signal processing framework for RF sensing in the sub-THz D-band (105--175~GHz), explicitly integrating EM blockage and scattering as a single process through the birth-death dynamics of multipath components (MPCs). The framework extracts, associates, and classifies MPCs from angle-delay measurements using statistically grounded detection and classification, enabling human-scale sensing from a single radio link. The modeling and classification of MPCs, along with large-scale EM parameters, are demonstrated through an indoor measurement campaign using multiple test targets. Experimental results show that newly formed, attenuated, and suppressed MPCs can be reliably identified with millimeter-scale delay resolution. Static object localization achieves average positioning errors of $8-20$~cm depending on range and material, while passive human localization yields errors of 12-17cm at 0.5m and 26-30cm at 2m, respectively. The proposed framework demonstrates that accurate sensing and localization are feasible at sub-THz frequencies using a single link.