If they allowed you to make a "hobbit hole" you now have a base that is invincible. Same with building into dungeons and caves

there are already 5, maybe 6 + ways to make invulnerable bases..
- islands
- terrain wall
- trench
- anti-spawn spam
- lofted (terrain platform)
- pathing exploits (monsters get stuck on things and you can make it happen with hoe/pick/etc)
- empty areas (eg the far north) where nothing spawns (still need to watch for events), and once you built, nothing will spawn because updates don't touch discovered areas.

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as for digging a hole, you can sometimes hoe dirt over your roof and blend it in. Stone keeps the rain out. Ive not tried to do this on a grand scale but I have hidden small rooms this way.