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You SHOULD tell them that if their life is in danger, to forget about minimizing the damage to the environment, and make the best shelter they can in the QUICKEST time they can!
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Yes we should tell them that in a real world environment they do not need to worry, but for this merit badge, they should look at minimizing the impact. I got my WS Merit badge at summer camp. We had a number of scouts in the class and over 6 weeks of summer camp, that could be a lot of pine trees being used for bows to sleep on. I found a natural A frame that I was able to cover with downed leaves for over head shelter and more leaves for the bedding.