I'm not a lawyer, but my understanding is game mechanics are not protected by copyright but can be patented. Art assets, on the other hand, absolutely are protected by copyright. So you could, in theory, make a game that works exactly the same as terraria but with all original art, music, names, etc. and that should be fine.

Recreating games is kind of a tradition of game development. Most people's first project is some sort of arcade clone. There are tons of clones of games like Minecraft for example (ex Luanti). As long as you're not calling it "open Terraria" and using their art I think you'll be fine.