I'm aware of the minecraft and factorio mods that do this. It seems you would use a sub-factory for:
- making a modular factory with pieces that can easily move
- space-saving so transportation is faster
- space-saving so you don't have to fight as many biters
- building your entire factory in a 1x1 as a challenge
- infinite storage in a 1x1 world or inventory slot
The main appeal is making modular pieces, but you can already do that. Make an auto-smelter factory and have a stack of auto-smelters in your backpack. Develop a system so all your factories have magnets and rollers in the same place so they can easily link together. You could make a generic "A-B-A" factory since a couple recipes all use that pattern.
The 1x1 challenge is cool, but that's pretty much a whole different game taking place in a non-euclidean world.
(implementing this would also mean having a block with more than 4 bytes of data, so that's a big technical challenge)