Help understanding why ... h6 is considered ok here


Your diagram is screwed up. Check out the pinned topic for tips: https://www.chess.com/forum/view/help-support/step-by-step-instructions-to-help-you-post-your-game-on-chesscom-forum

Also try not to attach the game and then continue typing, like you did. Type your whole post, then pick a place to insert your diagram later. In v2, you could corrupt the diagram by backspacing in the wrong place. Dunno if that's still the case.
We all did it at one point or another!

Thanks to both of you. @MichaelBuhler, duh! Thank you! Though he can avoid that by NxNd4 first. Then if, say ...c5xd4; Bxf6 Bxf6; Nd1 h5 and my king-side pawns are relatively secure and he is looking very cramped.

Though he can avoid that by NxNd4 first. Then if, say ...c5xd4; Bxf6 Bxf6; Nd1 h5 and my king-side pawns are relatively secure and he is looking very cramped.
This is incorrect. Black is not cramped at all, white is. Nd1 and Be2 are severely restricted. Also, black can play Bg5 instead of h5.