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You understood everything correctly; here it's just a "play on words." However, if, for example, you enter a tunnel that ends at the edge of the map and use your units to cover the entrance, gradually reinforcing them during the battle by, say, raising skeletons or summoning elementals, then it practically turns out that the Hero will still be hiding, and the monsters will be dancing behind the obstacles. :D
So, how did you manage to defeat the Nomads?
Well, this is already a hiding spot that isn't built by choosing the battlefield; here, you have complete freedom.