My understanding is that this is the motivating principle for the "bell" part of a rocket stove masonry heater. The hot exhaust from the combustion chamber is piped into a massively larger enclosed airspace, which has an exhaust port at the very bottom. Since hot air rises and cool air falls, most of the heat in the exhaust will be absorbed by the bell enclosure before finally being vented through the exhaust port. By enclosing the bell in masonry, it meets the design restrictions you mention.
I think it's also possible to build a masonry heater without using rocket stove principles, just a fireplace with a huge mass of masonry surrounding it. In that case, you'd want cladding with somewhat high thermal conductivity to capture the exhaust heat, but it's thick enough that the solution to the Fourier heat equation [0] is low enough to meet the design restrictions.
[0] https://en.wikipedia.org/wiki/Heat_equation#Heat_flow_in_a_u...