As I see it, that the whole point in this case. Alexander wants to teach children how to program in text mode, but can't see the bridge from Scratch to text mode. With textboxes, the child can write small functions to start with. As they learn, they may well start making the blocks of code more complex. Eventually they might end up with a single block with everything in it, as you describe. At that point they ditch the Scratch "wrapper" and start using a typical text mode tool chain. Mission accomplished.

One of my children did something like this. In the days when Scratch was written in Squeak, he discovered that shift-clicking the 'r' in the Scratch logo dropped him into the underlying Squeak environment. He then started modifying and writing Scratch blocks and was eventually comfortable with text mode programming.

I’m familiar with the Grasshopper visual scripting environment for the Rhino CAD system, and what you’re describing happens there as well…but I don’t really perceive it as a negative. Users who aren’t comfortable with text programming continue to use the visual method, and users who are tend to migrate their more complicated functions to single blocks. There’s a limit of complexity beyond which the visual programming becomes an impediment to understanding. It’s OK if moving things to a text-based block will make the internal logic of that block inaccessible to some number of users, given that those users would struggle to understand the visual version of the function as well.