I wrote a custom vegetation shader to allow it to respond to touch and wind. Ironically, most of the shader is about handling wind and not shading itself. There are just so many ways leaves can move in the wind and accounting for these is key to making it look realistic.
Also rocks are treated somewhat as vegetation too, only that they don't move. They are specially made to dynamically conform to the terrain so you won't get any floating pieces.
Vegetation can all be chopped down. Trees, bushes and even grass can be cleared. I haven't added resources yet, but chopping should yield some useful stuff like wood and fibre. As in the real world, you will need to dry chopped wood before you can use it as firewood.
The starting area vegetation is now more of a tropical biome with a lush green rainforest. No coconut trees. Real beaches in the remote wilderness actually do not have many coconut trees, most are human planted. There will be more biomes to come, like temperate, snow, desert and others.