Yea, if you are going with a log home you would defeat the purpose to cover the walls.
I remember when I was a young man. I helped my brother build a rectory for a Catholic Church. It was to be the home of the Priest, with the basement area being a meeting room for the elders.
It was in Cloquet MN, which is like 10 Miles from Duluth. The average Winter temp is like 10 to 20 below in Jan and Feb. So they wanted a super duper insulated house that was, at the time, new technology. The plans my brother used were from a Swedish company that was building these homes in Sweden and Finland.
We built it with double exterior walls, and we put two layers of 3/4 inch plywood on the roof. The main frame was 2x4s, with sprayed insulation, but then we put up another wall made from 2x2s and the regular pink rolled out insulation to make for a great barrier from the cold.
Then we wrapped a new technology fiber type of plastic made by Dupont around the whole house, cut the areas out for the doors and windows. Then installed new technology double pain windows, with heavy duty fiber insulated entrance door. We ended up using like 20 or 30 cases of silicone caulking on the place to seal all possible places air could leak through. Including every nail used on the house was caulked with silicone dabbed onto the nail heads.
The house was so tightly sealed that if you farted you would smell it for a Month we figured. However, that is dangerous for many reasons. So, we ended up installing an air to air heat exchanger to keep the air purified.
I remember the day it was tested by the specialists who rated the level of the sealing to insure a proper rating for a super insulated house. CNN was even there to do a news report on the test of the house. This was in 1983 when CNN was still fairly decent.
After ensuring all the doors, and vents from restroom and kitchen were sealed closed on the outside. All vents used to emit gas, including the sewage vents on the roof had to be sealed off for the test.
Then they taped a huge plastic barrier on the front door. With an attachment to connect a massive type of vacuume to suck the air out of the house. As this machine sucked the air, the house would create such a massive vacuum, that a meter would register how much air would come into the house. The rating beat the required number by 200%..
I Must tell you, we were pretty proud of ourselves. It was figured they could heat the place in the Winter for less than $30.00 a Month back then off an electric heater we had installed. Like I said, we are talking Northern MN. near Lake Superior.
Now the reason I share this bit of my history. After the test was complete, the Church elders voted to have a wood fireplace installed down in the meeting room so they could enjoy the warmth and aesthetics of a fireplace.
They completely destroyed the whole idea off a super insulated home. No way you can seal a fireplace with a chimney to keep the place sealed enough for it to keep rated as a super insulated home. The need for a air to air heat exchanger was destroyed, and a complete waste of money.
It would be the same thing as adding sheet rock, wall paper, or paneling on the interior of a Log Home.
Why buy a log home?