Nice shot of the wood working! We had woodpeckers do this to a couple of our birdhouses, so we had to add “portal protectors” (metal gadgets that surround the hole. Otherwise, the holes were big enough that larger bird (blue jays, for example) can get in and bother babies or eggs.
It is my understanding that they like the noise. We have a wooden bird house where they went after the roof like this fellow has gone after your hole. They also love to hammer away at our gutters and the wood siding around our chimney pipe. We've tried several different methods to stop them but so far nothing has really worked.
Love the clarity of this shot.