Well, it certainly makes sense that these little guys would have to relieve themselves. But what would it add to gameplay?
Fortunately, Radiant doesn’t seem too keen on micromanagement, so you wouldn’t have to explicitly order your workers to go to the bathroom. (That would be awkward.) But it’d be another thing that you have to build, certainly, which affects the balance of the game. Since outhouses are a basic need, like eating and sleeping, you would need to build at least one at the beginning of your game, which adds to the learning curve, as well as adding early-game tedium.
Finally, what would happen if you didn’t build an outhouse? For example, when you don’t build beds, your workers will sleep on the ground, and wake up with a “grumpy” debuff. After watching this project for a while, I’ve got a pretty good idea of Radiant’s sensibilities for Stonehearth, and I honestly can’t think of any debuff or consequence for not building an outhouse that would fit in the aesthetic of Stonehearth.