It's an instance of a third-person imperative (these are rare in English). The meaning is, "May God bless you." You are expressing a wish that God will bless the person. (You are not making a claim that God already does bless them, which would be the meaning if you said, "God blesses you.")

This is a subjunctive which expresses a hope or a third-person imperative. The historical form is "May God bless you," which has shortened to "God bless you." More information: https://grammar.collinsdictionary.com/easy-learning/the-subjunctive [excerpt] The subjunctive was formerly used in English for situations that were improbable or that expressed a wish. It is only rarely used in modern British English. It is, however, found in certain set phrases and in very formal forms of speech and writing. God save the Queen! God bless you! More information here: https://web.cn.edu/kwheeler/grammar_subjunctive.html [excerpt] 2. The subjunctive also survives in a few idiomatic phrases in English as well. For instance, when someone sneezes, we say, "God bless you," or "Bless you," rather than "God blesses you." In this case, examine the subjunctive phrase and contrast it with the indicative. Subjunctive: "You sneezed! God bless you." In the subjunctive, the phrase indicates a hope or desire that God bless the sneezing individual. Obviously, God isn't blessing that person at the moment, because the person is sick, so the subjunctive indicates a wish contrary to current reality in the speaker's viewpoint. Indicative: "God blesses you each day." In the indicative, the author indicates that God really does bless the individual. This speaker uses the indicative to reflect what he sees as reality; i.e., God blesses people.

It's the imperative (command) NOT the subjunctive.

It is using the subjunctive. You could thinkit as the person saying: "My wish is that God bless you".