I don't own anything modular as of yet, it's also going to take me some time to save for one. However I want a modular unit that is small and capable of ambient soundscapes and sound design. Does this unit look appropriate for those needs? Or am I missing anything essential?

I think it's a pretty good start. You might want to reconsider the Rainmaker for such a small rack. I find it quite bulky (and expensive). The 4MS DLD might be an interesting module to look at, and then you'll have a bit extra space for something like 2HP verb which is quite essential for ambient I think.

Good luck!

Looks like you're missing any form of control (save for moving the knobs yourself in realtime). LFOs, envelope generators, etc. Not to mention sequencing. You could just add a midi input module or expert sleepers and use a laptop for all the control.

Nope, this won't work. There's a lot of essential items missing here: no VCAs, no envelope gens, no LFO, nothing random, no noise sources, no mixers, no attenuators, and there's unnecessary things in here (Rainmaker, Ears). Plus, if you're trying to do decent sound design and ambient work, you're either going to have to resort to very small modules (6 hp and down) or expand the case, or (better) both.

Let's think ahead, also. You will want to expand this eventually. This means that your case situation needs to be thought out for this in advance. My take on this is that you should look into Intellijel's 4U x 104 hp case, a rather sturdy aluminum skiff-type cab which comes fully-powered for $319, and which can easily be added to later via Intellijel's joiner plates and more of their cabs. The other reason for 4U here is that you can take some of the basic functions and put them into the 1U tile row. You're limited to Intellijel's tiles (the 1U row here doesn't take the "standard" tiles) but they offer most of your necessary basics (ie: MIDI, mixing, sample & hold/noise/clock, audio I/O, etc).

Next, shrink the hell out of things in the 3U row. Don't use single-function modules if you can help it, and keep the module widths as low as you can. Even if this raises the cost some, the end result will be more function packed into the build, which means more capability for what you want/need. Also, limit what goes into this to pure functionality; if you can move 3U functions to the 1U row via a tile, do so. Avoid mult modules since they waste space in smaller builds and use stackcables or inline mults. See how far you can go without compromising ergonomics and playability (which, if you go too small, you run a real risk of doing). Plus, if you can do anything outboard (such as effects processing), do so...leave the space in the cab strictly for things which cannot be replicated outside of it.

Lastly, remember that a synth has to have aspects of these four functions: generators (VCOs, noise, etc), modifiers (VCFs, VCAs, ring mods, waveshapers, etc), controllers (mixers, MIDI interfaces, joysticks, clocking, sequencers, etc) and modulators (LFOs, envelope gens, sample & holds, etc). If your build doesn't have parts from all four of these synth "food groups", it's not going to function well.

Yes a MIDI input module could be a good idea, as I have an OP-1. Although I figured that Ears could be a good way of inputting external audio. Although I'll be honest, I'm suprised to hear some say this wont work - yes I am new to modular, but I've seen quite a few videos on Youtube (Lightbath, etc.) and Instagram of people using small units with similar modulars, and they units generate the warm ambient soundscapes that I wish to.

If you look at things like the Lightbath videos, something is sequencing the voices... in his Loom series, for example, it's Mutable's "Marbles" module.

If you are only processing external audio, I'd suggest replacing Plaits with something like Batumi or Pam's New Workout (and you'd have a little room left for another modulation source in 2-4 hp). That way, you could bring a signal in through Ears, process it with Rings and Rainmaker, and use Batumi/Pam's/extra little module to modulate various parameters.

If, on the other hand, you expect this system to generate all of your sound, you're going to be disappointed. As Lugia said, you need modulation sources... this system has none (in those same Lightbath videos, he uses Mutable's "Stages" module for this role... and in his other videos, he uses many other things).

One other thing I'd suggest... go for 104 HP instead of 84. The size difference is small, and the cost difference will be negligible, but it will give you more flexibility.