Not as much protection as you'd think.
Try this at home - get a shovel, and try to pile "loose earth" into the shape you've described (3ft tall, 2ft deep wall). It will immediately fall down into a pile. The angle of repose of soil is 30-45 degrees. In your configuration (2ft diameter base) the pile needs to have an angle of repose of 75 degrees. So the entire thing flops over to about half its height. The soil from the sides of the hole is also falling inwards, filling up your hole, probably reducing the amount of cover from the hole by half as well. If you're unlucky, the soil from the wall will fall backwards into your hole and reduce the depth even further. It would look more like this:
| OO
| OOOOOOO
XXXXXXXXXXXO XXXXXXXXXX
XXXXXXXXXXXOOO XXXXXXXXXXXXX
XXXXXXXXXXXXOXXXXXXXXXXXXXXX
If you're lucky, you'll get 3 feet of cover (partial cover) out of this. There's a reason soldiers build trenches out of packed, not loose, soil.
I only have a basic understanding of the principles of stone sculpting
and any insights are appreciated.
Use your imagination. What do you want it to look like?
D&D 5e is not reality simulation, nor does it attempt to be. Difficult terrain is ground that is hard to walk on, an area where you are slowed down by trying to move through it. This could be a pile of boulders, a swamp, mud, or just very uneven ground where no two steps are on the same level.
Assuming the caster is skilled enough to smooth the stone within the hour, such that it is no longer difficult terrain, what happens when the spell ends?
The magical effect ends. Whatever was there becomes what it was before the cantrip was cast. The duration of the magical effect is one hour.
How exactly was the stone warped in the first place?
By magic.
How does normal terrain become less difficult terrain?
By magic.
Would the effect be ascetically pleasing or would it look sloppy?
That depends upon the interaction between the player and the DM.
Use your imagination. What do you want it to look like? This is where a DM's ruling is appropriate. Tell the DM what you want it to look like. The flow of events in D&D (p. 3, Basic Rules) is:
How to Play
1. The DM describes the environment.
2. The players describe what they want to do.
3. The DM narrates the results of the adventurers’ actions.
You describe what you want it to look like. The DM rules on that with your input considered.
The philosophy that the game started with still applies. D&D 5e has tried to unify the D&D fan base, in some cases reaching back to first principles ... When Imagination Was The Only Rule ... the theme behind Rob Kuntz'1 projects.
Action required: use your imagination and describe what efforts you are putting into this bit of magic-assisted sculpture, and what you are trying to make it look like. Give the DM something to work with so that he doesn't have to do a lot of work to arrive at a ruling. (As a DM of some experience, I promise you, such efforts are appreciated).
1 Who is Rob Kuntz and what does he have to do with D&D 5e? The front page of the rule book says that the game is:
Based on the original D&D game created by E. Gary Gygax and Dave Arneson, with Brian Blume, Rob Kuntz, James Ward, and Don Kaye
Best Answer
You are right
The first effect is an instantaneous effect, thus is not subject to the two active effects restriction. Even the last sentence explicitly describe the restriction only apply to non-instantaneous effect (second and third effect). However, remember that mold earth is only able to excavate loose earth. You might not be able to dig a deep hole with that.