bringing the idea further... is it possible to move the game towards something like "noita" where each pixel in noita can interact in a ton of ways etc... except here it would be a voxel?
I don't think so with the current engine, however, we do have a pretty solid particle system that does allow for some cool visuals similar to Notia. But that said, I'm not sure what "Notia inspired" physics would look like in a 3d game... I guess a lot of blocks melting? Could be cool to experiment with :) I know there are voxel engines that are far more geared towareds this than we are, we try to store information about each voxel as compactly as possible for efficiency, and we use LoD at the macro level (mountains off in the distance) rather than the micro level (zoom in really close on a single vosel, more geometry becomes visible).
I do think adding a Noita-style cellular automaton would be fairly straightforward.
Currently Veloren has water and lava, but neither will flow (e.g. if water blocks are manually placed on top of a hill, they won't flow downhill, fortunately this is rare due to worldgen). A simple way to fix this would be to have an ECS system that uses CA-style rules (e.g. a water block with an adjacent-and-below air block swaps places with that air block), though naively doing this would be expensive (iterating over all loaded terrain chunks every tick). A possible optimization would be to detect such blocks, remove them from the main terrain grid, put them in a separate entity-with-terrain-collider (the same kind we use for airships), and only iterate the (sparsely populated) AABB of fluids-that-have-recently-moved. This is similar to what Noita does with keeping track of recently-updated terrain rectangles. Once this is in place, it can be straightforwardly extended with more fluid interactions (e.g. Minecraft-style water + lava = obsidian, more Noita-inspired gases rising).