It is a pre-hardmode underground desert (I tried a playthrough with items brought from other worlds), and should be no other biomes nearby.This is a known issue and it's been one that I've seen myself too. There's no known way to reproduce it, so it's been present since 1.3.x. Is there any info you could share that about your location in the world that might help? I previously thought it might occur on the boundary where the normal desert meets the hallowed desert.