How do I drop outgoing packets to specific host/port? I want to test something locally. For that, I'd like to be able to drop outgoing packets sent to a specific host/port. I tried messing around with pf rules using Murus (the non-free version), but have been unsuccessful.

I am comfortable in the terminal, but am unsure where to make any changes and how to apply them. I am familiar with iptables on linux.

Can I get some direction on how to achieve this?
You could use the PF firewall:

Add this line to /etc/pf.conf to drop all packets to the given ip:port 

block drop out quick proto tcp  to 192.168.1.103 port 80


After changing pf.conf you should reload it with

sudo pfctl -f /etc/pf.conf


Eventually you will have to enable it with

sudo pfctl -e