In this work, large-scale molecular dynamics simulations are conducted to explore the thermal and mechanical phenomena in surface nanostructuring with a laser-assisted scanning tunnelling microscope. Employing a super parallel computer, more than 200 million atoms are modelled to provide substantial details about how the localized thermal and mechanical perturbations result in surface nanostructures. Extremely localized stress accumulation beneath the sample surface leads to an explosion of the melted/vaporized material, leaving a nanoscale hole in the sample surface. Normal and shear stress development are observed. Stress propagation in space is strongly influenced by the anisotropic nature of the crystal. The high pressure in the melted/vaporized region pushes the melt adjacent to the solid to move, thereby forming a protrusion at the edge of the hole. More importantly, visible sub-surface nanoscale structural damages are observed in a direction 45˚with respect to the axial direction. Detailed study of the lattice structure reveals atomic dislocations in the damaged regions. Both temporary and permanent structural damages are observed in the material. The temporary structural damage is featured with a formation, propagation and disappearing procedure.