2How to craft it
Autohammerit is a digging tool
The damage is the advertised part; the terrain destruction is the reason to carry it. Load a launcher with these, point it at a wall and hold the button, and you clear ground faster than any drill or pickaxe in the game. For hellevators, arena floors and long horizontal tunnels it is not close. The faster your launcher fires, the more absurd it gets.
where not to use it
The same blasts eat the arena you just built, the platforms you are standing on and anything decorative in range. Fire one near your base and you will spend longer repairing than fighting. Keep the non-destructive rocket loaded for anywhere you care about the blocks and swap to this for open ground and tunneling. Multiplayer makes that etiquette rather than preference.
the name
A Fallout reference, where mini nukes are football-sized warheads you fire from a shoulder launcher.