Not considering code or insurance issues. Burning foam gives off choking poisonous smoke, period.
Sheets of plywood and 2 x 4 legs are perfect kindling wood to throw heat at the unfinished bottom side of any foam scenery. Just be aware of the potential hazard complications in case of a fire.
If you have a house fire you more than likely will not even be thinking of what you used to build the layout years before. Therein lies the problem. Out of sight out of mind, just like your 401k.
Structure or hobby, code or no code, insurance or no insurance. You may very well be code compliant but when sucking foam smoke, dead is still dead.
Hot Wire instructions advise not to use a hot wire on foam without excellent ventilation. Even best to do it out side.
We have been using foam for residential construction and model railroading for many years. Just know that the extra vulnerability is there.
As far as insurance issues. Insurance companies take a dim view of non code work. If you bugger your own non inspected, non permitted 220 service up grade some companies will balk at covereage. If you mess up on a restricted plumbing job and there is a loss, same thing. As was said earlier. Know you policy, coverage and exclusions.
Use a public adjuster for losses if you are not satisfied with the company offer. Even the threat of using a public adjuster may get a company adjuster to be a bit more generous.
You would be suprisede at the coverages that can be found in the average policy.
When there is a gray area the law requires the decision to favor the insured.
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