Oh that is a interesting one,
Was doing a similar thing with the material, with draw 3d box in the material itself, and using its coordinates to make the “hole”, which worked right aways, except I could not figure out how to stop each proxy of the landsacpe to also have a hole in it 
and the coordinates were quite off from what I expeted . Took it from here “https://youtu.be/N_pq2RYTG04?si=s_k4WC0-Y4Jl9_Bl&t=362”
the way he paint is the video you share is somewhat different, well maybe all that math with the map size and such is what I was missing.
Sad to know that the landscape is like “left a side” for 20 years. Most stuff I’m seeing are done with pcg over landscape and deforming landscape itself with pcg, and yet, landsacpe is that terrible as you mention.
Anyways, thanks for the feedback, wasn’t really expecting any answer from a topic that old.