I have to agree with whoever said marshmallow underneath probably. I've been staring at this picture and contemplating how I would do it, and the options are a lot of cake carving, then put smbc, chill, carve in some more, then thick-ish fondant, then impression it. OR marshmallows individually wrapped and placed. or if it's on a dummy layer, maybe just cotton balls.
I think probably if I were to do it for a real cake layer, I would go with all of the carving.