Totally agree with you Ziljoe I wouldnt find digging in frozen ground on a hill full of rocks exactly pleasant . However there is a map on the forum that shows a labaz not to far from the proposed tent site on the side of 1079 and judging by one of the last pics they took it does show them digging/levelling an area, could this be the "tent site or a Labaz".
There is also the possibility that it indeed was a labaz as the group needed the height to carry on towards Otorten and a labaz on the way back was suitable at this spot.
As stupid as it sounds (talking about weight) maybe Igor has said they need to suck it up build an (overnight labaz) because of the weather then go down to the treeline to erect the tent and walk back up again in the morning.
The only problem with this theory is was a labaz found further back on their treck, cant say we have heard about one, but then again could it have been missed.

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Perhaps they thought about it. , The concept of building a labaz or store somewhere around dyatlov pass fits the logic of hiking . Dyatlov pass is a key point of the return pathway , it's here that the planned route crosses or comes close enough to build the labaz to save carrying the extra weight. It would be unproductive to carry it from the last campsite .
It would seem there's three options for the hikers to build the labaz, 1) where it was found 2) at the ceder 3) on the slope of 1079
Options 1 and 2 make the most sense. They are both in the tree line . That gives them the option to cut extra logs for the return camp and an established place to camp. All the hard work is done for the night and you can pack the backpacks from scratch the next morning.
But choosing location 2( at the ceder) means you have carried the extra weight over dyatlov pass ( up hill and further from the return path) less logic as you have carried the food to another valley .
If it is option 3 , on the slope of 1079 it adds the problems as mentioned in the previous post , that is they would need the guarantee of a clear weather window to find the labaz on the slope . It would mean stopping on the slope , unpacking their packs , redistribution of all the food across 9 back packs , packing it all up and then moving onto the next campsite. I suppose we could argue that they might set up the tent on the return leg on the slope next to this supposed labaz to carry on the next along the ridges but the last thing you would want is to be lost from your supplies . That being said , they would have a quick exit by going back they way the came and not finishing the loop.
The last photo shows atleast 5 people in a row, too big for a labaz in my opinion and we have the alleged location of the found labaz .
If it's any other option other than what we have been told , then someone is running about digging up food stores and moving tents whilst leaving no trace and managing to cope with the environment.