I believe the trees are Ironwood, so it is likely that they are very hard to carve.

I think Kypiq structures will be built upon tree branches and possibly around trunks with fallen timber and other non-living plant material. If there are available natural spaces within trunks, perhaps from decay of the internal wood, then those would be used as well. I don't think Kypiqs will make cavities in trees, but they might cut doorways to access pre-existing cavities.

Of course, this is all speculation.

Kypiq homes and buildings are placed upon mushrooms that grow around the tree. This then allows us to have walkways etc in the trees. There is a few pictures showing this.