What really was the Sound Test #10 in STH2 going to be used for?

Well, yes. As I said, its one of the earliest Sonic games. There you can have a cave full of minerals with mining facilities and call it Dust Hill or whatever, and that's perfectly fine. It doesn't need to make sense, because it's a Sonic game.
We have other "amazing" names like Sunset Park Zone (not a park, but a rusty train yard), Meta Junglira Zone, Aqua Planet Zone, Scrap Brain Zone, Sparkling Zone, etc. We can also live in peace and let die with a cave called Dust Hill Zone.

Glad to see you discussing and well, Mr. ICEknight.

 

I still don't believe that this can be 100% affirmed when Hirokazu Yasuhara himself linked the "Dust Hill" name to the desert mockup, and more importantly, said it was a scrapped zone. Mystic Cave was not scrapped.

 

I still beg to differ with the naming convention. I don't think many were finalized and a lot of levels took others slots. I feel like at the time, code aggregation wasn't really a thing, so you had it all over the place. My guess is that at some point, they were like "Screw it, the cave level can go in this slot for the time being". I only think this because of Neo Green Hill zone. Name makes absolutely no sense for Aquatic Ruins, or Olympus zone (totally was probably that at one time).