Yes, it's quite a good surfacing paste. Apply thickly, let dry, scrub off with an old brush. Repeat (many times).
It does shrink quite a lot, so it takes many applications to get a good result with it, but as it's dyed, you can see imperfections in the surface quite easily.
As a gap filler though, milliput is still king in my opinion. For terrain, I've also taken to using pre-mixed wood filler which works pretty well.
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