For caves its best to do what Fallout and Skyrim does and this is a static entity of caves, funny enough pieced together in a similar fashion as our new construction kit.
Caves are very rarely ever dug out of a terrain plane. You pretty much have your terrain as your base always and anything that happens to overhang above the player is always a static structure (not of the same model the terrain). In most cases there is no terrain plane at all.
Quote: "You will notice that many even use a simple cutscene to transition between these kind of areas using a completely new level."
Fallout/Skyrim does this as well. I personally do not plane to have a cave level outdoors anyhow. Its best to build areas like that as an interior map. When we get our hands on the construction kit I will immediately be planning to create more organic looking walls, floors and ceiling models - for the use of internal cave building.
Here's an example of a Skyrim cave which is completely interior and does not use a terrain plane base. Just stitched together cave pieces which we will be able to do soon with the construction kit.