These short walls are often left unbraced, contrary to code requirements. All building materials expand and contract. The manufacturers of building products often specify a gap be left between panels in order to allow for expansion. If your building material expands with nowhere to go, damage can occur. If these holes are not properly sealed before the application of wall, ceiling or floor coverings, potential problems exist in the event of fire.
Fire needs oxygen to continue burning.
Holes and notches are a perfect path for oxygen to be sucked from an area that is not burning to an area that is. Cutting off all paths for oxygen is what is called firestopping and draftstopping. These rules are violated frequently. Once these problems are covered up no one knows they exist until its too late. Notches in framing members that exceed the allowable limits or that are in prohibited locations.