It doesnt “work” in 16 bit. Nor save in 16 bit.
If you even open up the file you compromise your data as all the values get changed to their nearest 256 color counterpart.
You lost 65535-256 data just for opening the file.
It is absolutely not a good tool to use for heightmaps.
Heightmaps are data, not graphics.
Stop even thinking of them as graphics.
World composition or world partition both do this.
But how isn’t really important. Start by making sure you have the correct files at the correct scale importing and working correctly.
Once you know they do, you can then work on figuring out which version of the world tools to use for your project / or you can do the math to place the levels at their correct place.