Yes, you could that or just add another layer of Sheetrock.

Thanks! I figured it shouldn’t be an issue. My main concern was whether that frame would ”sweat” with a temperature change, or just the inside/outside difference, and build up moisture behind that extra rock/framing.

Just my opinion, but I wouldn’t carry the drywall that far in. It will appear out of balance, almost like a port hole. I like your idea, but would only carry it as deep as the red outline shown in your sketch which could be accomplished by doubling the sheet rock as Toddinmn suggested.

Appreciate the feedback. The above would be the most exaggerated version, but like your saying, I’ll probably tone it back a bit. Thanks!