Factorissimo adds factory buildings to Factorio. Place them down, walk in, build your factories inside!
Mods introducing new content into the game.
Is this intended behavior or a bug?
That's an unfortunate interaction between Factorissimo2 and the Water Fix mod, which I assume you're using.
Ah, yes. I'm using that mod. Sorry, my mistake.
On this note, is it possible to "reset" the inside of a factory? Or should I just destroy the item and make a new factory?
You can always simply empty the factory building and reuse it somewhere else later.
