Although some rabbit breeds may not be as interested in digging as others, many rabbits do like to dig. In nature, Rabbit Mom's give birth to their young in burrowed holes for security from predators. These burrows are then used as rabbit dens.
Because rabbits have strong front paws, they like to dig burrows or holes primarily as a safe place to sleep. People like to rest in a quiet place away from noise or distraction, and bunnies are no different. They also use these safe spots as a place to retreat from perceived danger.
Again in nature, rabbits tend to keep close to their burrow, finding food and other needs close to home. Bunnies will often build their burrows in a larger community, or cluster. These clusters are known as a "warren". The male rabbits must protect the members of the warren.
For your pet rabbit at home, providing a cardboard box or safe container, with soil, sand or bedding material in it can provide some fun and safe "digging time" for your bunny, allowing her to satisfy her natural urge to dig!