Currently we are playing a horror adventure in D&D 5e. Due to circumstances (beings locked in a haunted house, rooms changing just when we close the doors, etc.), a 1-hour rest is hardly possible.
Our DM ruled that short rests can be as short as 10 minutes. The obvious result is that we can take it. What are other changes that we, both players and DM, should be aware of?
If it matters, party consists of Lore Bard, Vengeance Paladin, Chaos Sorcerer and Divination Wizard, all level 3.
In your case, there's not that much of a big deal, primarily because you don't really have any classes that scale tremendously well with being able to quickly rest up after every fight, except for the paladin.
A 10 minute rest means you can quite literally rest after each and every fight, but that is generally not that big a deal because you will eventually run out of hit dice to use for healing. However, there are some classes which scale really well of short rests.
Some problematic class examples:
Cleric: Being able to rest after every fight means you always have your channel divinity ready.
Paladin: A paladin's channel divinity likewise comes back after short rests, and for your vengeance paladin this means that he will basically have advantage against one enemy every combat. This is a pretty big damage boost for them, which combined with fishing for smite-crits might result in your paladin being able to one-shot a lot of the important enemies if they get lucky, until their spell slots run out.
Fighter: Being able to rest after every fight means you can very quickly heal with your second wind and deal out a lot of extra damage with an action surge every fight. In addition, battlemasters will be able to use their maneuvers a whole lot more.
Warlock: Essentially infinite spellslots because you can take a quick 10 minute break to get them all back.
On the flip side, your classes don't scale that well with short rests:
Wizard: Arcane Recovery is a once per day short rest ability and your divination wizard abilities all refresh on long rests.
Bard: At level 5, he'll be able to regain all of his Bardic Inspiration on a short rest instead of a long rest, but currently at level 3, it makes zero difference.
Sorcerer: You'd be able to recover 4 sorcerery points every 10 minutes if you ever made it to level 20. Aside from that, everything refreshes on long rests.
So asides from recovering HP a bit faster, and your bard getting more bardic inspirations once he reaches level 5, the biggest problem is going to be that your paladin is going to be extra effective.
In addition, somewhere in a corner, the spell Catnap is crying itself to sleep.
A lot of other questions seem to claim that there is "no difference" because time is entirely narrative, but this isn't true at all. Taking that to the logical extreme, a short rest of 5 minutes and a long rest of 10 minutes should make no difference because "time is narrative" and the "DM can simply say if the rest passes or not", but this only works if your DM uses the "roll a dice to see if something happens" method of DMing.
If, instead, your DM runs the world as continuing while the players aren't involved, instead of the world "stopping" whenever the players aren't involved, then it makes a huge difference if you stop being involved for 10 minutes or for an hour. Spell durations can last through short rests, the ritual of the evil bad that takes exactly 6 hours will suddenly allow for a lot more short rests, etc.
Several official campaigns have these types of time constraints, and in a realistic setting where time keeps going when the PCs aren't there, this change makes a huge difference.
This is the difference:
1 hour rests
Player: We’d like to take a short rest.
DM: OK. 1 hour later ...
10 minute rests
Player: We’d like to take a short rest.
DM: OK. 10 minutes later ...
The difference is exactly two words in the DM’s narration.
Unless the DM explicitly limits time through the story (e.g. evil ritual finishes at midnight) or imposes an actual cost on the players (e.g. through wandering monsters) in-game time completely irrelevant.
That’s because, while D&D 5e is a resource management game; in-game time is a malleable resource - there is exactly as much of it as the DM needs.
There is an official variant rule for that (and even more). DMG page 267 has the "Epic Heroism" variant rule, the short rest is 5 minutes there and the long rest 1 hour. It also has the "Gritty realism" variant with longer rest times. The obvious repercussion is the fact that party can afford more (or less) combat encounters per day. "Epic Heroism" also makes the campaign less resource-demanding, which might be a bad thing in case of a horror adventure.
I mostly agree with Dale M’s answer that it’s only a narrative difference. Resting for 10 minutes can be just as dangerous as resting for an hour if the GM deems it so.
However, some spells and effects which last for 10 minutes are more beneficial with a 10 minute short rest. For example Spirit Guardians or Spike Growth (both 10 minutes duration) could protect you for the whole duration of the shortened short rest but wouldn’t make much of a difference for a normal short rest.
Having to spend less time on short rests also means that you can do more adventuring while a spell is active (or even just do more things in a single day). For example See Invisibility lasts for an hour. With the shortened short rest you could search for ghosts for half an hour, then take a rest and continue searching for 20 minutes while the spell is still active.
All of this requires accurate time keeping by the players or GM for it to really matter.
Fundamentally resting rules are about pacing the game. The DMG offers resting variant rules (DMG 267). Generally resting is balanced around the adventuring day (DMG 84) which assumes encounter balancing (DMG 81-85, 102) around resource management and XP-gain.
Whenever you try to change the pacing of the game by adjusting the resting length, you want to understand what resources the book assumes you to have. Note that this, like encounter balancing in general (see challenge rating, 82, 92, 274, 274- 275, 279, 306-309), is no exact science.
When your DM keeps the pacing of an adventuring day intact, there is little to no difference in resources.
The DM has to understand the challenges and encounters that they provide. DMs that are used to play with a particular resting ruleset are prone to misjudge what makes an encounter (DMG encounter, 75, 77-87, 102, 106).
A particular thing that I notice when playing with inexperienced DMs is that they only count combat encounters as such, while they dismiss information gathering, time restrictions, planning, social encounters and events that drain resources.
Another issue is that these inexperienced DMs tend to offer too many short rests for an adventuring day (DMG 84):
Assuming typical adventuring conditions [...] adventuring parties can handle about six to eight medium or hard encounters in a day.
[...] over the course of a full adventuring day, the party will likely need to take two short rests, about one third and two-thirds of the way through the day.
So make sure that you keep to the general structure of an adventuring day to keep the balance intact.
