The cover has two benefits, one is it keeps the hole from freezing up and two seems to make the tip up bait more appealing to walleye or perch because of blocking out the light.
I would think the bobber stop would be hard to move on traditional tip up line. Maybe on a super braid it would be fine though. I use a small split shot for a line marker and rarely have a problem with it moving or coming off on the bottom of the ice.