Here’s the normal buffer of a 4x4 displacement, each section is to the power 3
And here’s how it looks lit:
The material is just blank except a solid grey colour linked up to the base colour, but as you can see, it’s the normals not blending properly. I’m using the CSGO version of Hammer. But maybe the problem is there in source engine just not as obvious due to the lack of reflections on displacement surfaces.