Yes other players can terraform that space into a different terrain. That space is never really yours until you built a building on it.
Also there are several reasons to terraform a space into something other than a home terrain:
1. you get a free spade from the end of turn cultist bonus.
2. you don't have enough workers to fully terraform to home terrain (so you split into 2 rounds to do this)
Also you could get points from terraforming one round, so even if you don't get your home terrain you might want to do it for the points, even if you don't have the resources to either fully terraform to your terrain or build onto it.