Hello,
I do not think Nanite is supposed to behave the way you think it should.
If I’m wrong, I hope someone could clarify, but for tessellation to work (from what I’ve seen anyway), Nanite requires that density of polygons to do what it needs to do. You can Google images of Nanite tessellation triangles, and you’ll always see images similar to yours.
To put your mind at ease, you can test the performance of this process, but I’m very confident that tessellation will always be more performant than an actual 3D landscape.