I seem to recall that smaller terrain designations were considered a few times... and I maintain that having retaining walls only five tiles high half the size of terrain designations that they are exclusive with renders them largely useless, as the steepest retaining wall angle is roughly equal to the angle of repose of rock.

There are also a number of cases where terrain features are... difficult to create. Take this for example:

It's not possible to make that "bowl" via mining, only dumping- and while I'd like to make a peak between the two towers as well, that would only possible via mining, which would necessitate the removal of the towers.

On the other hand, while having single-square or four-square (as different from the current sixteen-square) designations would be potentially difficult for players to manage, what about enabling additive or subtractive effects? That is to say, allowing someone to place multiple designations on top of each other (while in a special modifier mode, probably), and have the highest- or lowest- of them count, possibly with a sequence, such that complex topography like this bowl- especially with that little desired ridge between the towers- could be created in a single dumping/mining pass, rather than two or more? Even a terrain leveling pass, rather than solely dumping or mining?

Integrating retaining walls into such a system would allow for the definition of which side of the retaining wall centerline the designation belonged, thereby allowing retaining walls to be built much closer together- and importantly, much tighter in to protected structures, like rail pillars. As an example, if I wanted to lay retaining walls around these pillars in order to protect them while I dug around (I've had occasion to do that before) without making it an ugly dig, the walled region would be absolutely massive, thanks to being forced to place them based on terrain designations:

... It would even be forced to include the neighboring pillar, which is absolutely ridiculous, simply so the terrain could be cut right up against the walls:

Given the amount of space the pillars actually occupy, this is ridiculous, I should be able to place the walls closer in without creating something absolutely atrocious. Yet, the current system doesn't support that.