I'm not sure about your story component. I don't think Wood Elves can hide behind bushes because they're expert contortionists with wilderness training.When Wood Elves are outside in nature, the entirety of the natural world is there for them to mask themselves in and which is their bread and butter. So if there's a bush, the elf can hide behind it because they know what parts are the best to sit behind, their clothing matches, they contort their body in such a way that it melds into the forms of the bush, and so on. By the same token, if they're outside in Dim Light they know how to for instance lie flat on the ground and look like they are part of the natural terrain... or put their bodies into a position to make it look like they are a small tree, a rock, or some other natural object. So the Hidden status is acquired partially from a Game Rule, and partially from the "story" of wood elves in the natural the world.
Whereas underground, it's implied they just do not know underground terrain nearly intuitively enough to hide in the "open" of just Dim Light by position, form, or replication alone.
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this half-Game Rule / half-Story justification to Mask of the Wild
It's because they are magical creatures of fairyland.