Toads burrow. They sleep in their burrow. I have hides for my toads. They still burrow. Even inside the hides. My toad enclosure is riddled with burrows lol.

Personally I only keep one side of my enclosure damp. This is so the toad can choose their moisture level. I'm not too OCD about keeping it damp though. They have a large water bowl they like to sit in first thing when they wake up. As long as you have water somewhere they will hydrate themselves as they need.