Currently Tresario Star Kingdom is slabbing a planet, that's perfectly legit, but it really seems like they are exploiting a certain feature. Nearly half the planet is covered in hidden cities and I think that they hide them only to delay others from also slabbing. In fact I'd wager they did this in the past and they never intended to hide the cities at all and likely revealed them at a later date so they could build bigger buildings on the slabs for FI planets. It is rather obnoxious and it doesn't seem like the intention of the feature.
I think the proper used would be to hide a city for the intention of hiding it. To try and hide military facilities, for RP hideouts, or just for privacy. As opposed to hiding half the planet for purely here and now delaying. I could be wrong, but what they do seems inappropriate to me.
"Well, you're Azala, so you always tend to be 'bad', even when you're being 'good'."