Great article on history. And at the end,

But besides a bit part in a TV pilot, the nuclear subterrene didn't get much farther. In 1975, the project was transferred from the NSF to the new Department of Energy and quietly disappeared. The concept resurfaced in the 1980s as a way of digging tunnels for bases on the Moon and other worlds but remained a concept. Advances in conventional excavation equipment since the 1970s make modern TBMs perform as well or better than Los Alamos' conceptual nukes

So much for the nuclear powered melting idea. However, that doesn't mean DOE or DARPA aren't still messing with it.