just wondering does it only work on player placed blocks cause it could cause issues with ebonstone/crimstone being unmineable for most of early game
The only instances where it's more convenient than simply a shortcut to "remove block with pickaxe, place new block manually" is when you have stuff above the block you remove (like furniture, sand/silt/slush, liquids, etc.). Also when swapping containers.Block Swap uses the mining power of the strongest Pickaxe in your inventory. Therefore, you will not be able to replace blocks that you cannot mine and it will take the same number of "swings" to replace a tile that your current pickaxe takes to mine the same block.
By and large it doesn't really affect gameplay, just makes updating your base a little less tedious. It's not going to let you cheat.