Here it is referring to loose earth that does not require further crushing.

The Gemara challenges this: But even in the case of loose earth, one makes a hole by the very act of removing the earth or the shovel from that place. The Gemara answers: This ruling is in accordance with the opinion of Rabbi Abba, as Rabbi Abba said: One who digs a hole on Shabbat, but he needs only its earth and has no interest in forming a pit, is exempt for that act. Since he has no interest in the hole, he is considered to have performed a destructive act, and the halakha is that one who commits a destructive act is not liable for the performance of prohibited labor on Shabbat and Festivals.

§ The mishna states: That the ashes of a stove are prepared. The Gemara express puzzlement at this statement: The ashes of a stove, who mentioned anything about it? Why does the mishna suddenly speak about the ashes of a stove when it had not previously discussed or even mentioned them? Rabba said: This is what the tanna said: And the ashes of a stove are prepared. In other words, everyone agrees that in addition to prepared earth, the ashes of a stove are also considered prepared, and one may cover the blood with them. It is not necessary to prepare these ashes especially for this purpose the day before.

Rav Yehuda said that Rav said: They only taught that the ashes of a stove are considered prepared if the stove was ignited on the Festival eve, so that the ashes had already formed at the start of the Festival. However, if it was ignited on the Festival itself, the ashes are prohibited. And if the ashes are still hot and fit to roast an egg in them, they are not considered muktze, and therefore it is permitted to use them for covering as well.

The Gemara comments: That opinion is also taught in a baraita: When they said that the ashes of a stove are prepared, they said so only when it was ignited on the Festival eve; however, if it was ignited on the Festival, they are prohibited. And if the ashes are still hot and fit to roast an egg in them, they are permitted.

The Gemara further states: If before the Festival one brought earth into his garden or his ruin to use for various needs, it is permitted to cover blood with it. And Rav Yehuda likewise said: A person may bring in a basketful of earth the day before the Festival and use both the basket and the earth it contains for all his needs on the Festival.

With regard to this case, Mar Zutra added and taught in public in the name of Mar Zutra the Great that the application of this halakha is limited: And that is the case only if one designated a corner for this earth, thereby demonstrating that he intends to use it for all his requirements, rather than merely bringing earth in to scatter over the floor of the house. In that case, the dirt is nullified. It is considered part of the floor, which means that it is once again classified as muktze.

The Gemara raises an objection against this from a mishna (Bikkurim 4:9): In the case of a koy, a kosher animal with characteristics of both domesticated and non-domesticated animals, one may not slaughter it on a Festival, as it is uncertain whether or not its blood requires covering. And if one did slaughter it, he may not cover its blood. And if it is so, that one may use his basket of earth as he wishes, as claimed by Rav Yehuda, even if a koy is definitely a domesticated animal, let him cover it, in accordance with the opinion of Rav Yehuda.

The Gemara expresses surprise at this objection: And according to your reasoning, one could equally suggest: Let him cover the blood of the koy with ashes of a stove or with earth dug up with an embedded shovel. Rather, this mishna must be referring to a situation where one does not have prepared earth to use for covering the blood; here too, one can say that he does not have a basket of earth ready for all his needs.

The Gemara asks: If so, if the mishna is referring to a situation where one does not have prepared earth, why discuss specifically the case of a koy, where there is uncertainty whether there is a mitzva to cover its blood? Even in the case of an undomesticated animal, whose blood must certainly be covered, slaughter should also not be permitted, as the halakha is in accordance with the opinion of Beit Hillel that one may not slaughter if he does not have prepared earth.

The Gemara explains that this baraita is speaking utilizing the style of: It is not necessary, as follows: It is not necessary to state the halakha with regard to definite undomesticated animals and birds, that it is not permitted to slaughter them; however, with regard to an uncertainty, one might say: Due to the joy of the Festival let one slaughter it and not cover its blood, as there is uncertainty whether there is a mitzva to cover its blood, and therefore it is overridden by the mitzva to rejoice on a Festival. The baraita therefore teaches us that one should not slaughter it ab initio if he does not have something prepared with which to cover the blood.