Hey thanks Seelan,
Ahh, it's a shame to hear that it could be a bit of a headache
I ran into the issue when I started using HDA's to generate UI elements for the game, some of them were embedded in prefabs and bad things started to happen. I might have to look into using the bake options in those cases which is fine but not quite as nice as just having them right there in the scene.
I reckon you should keep prefabs on your radar though as they are a big improvement in Unity and I'm sure they'll only be used more and more.
P.