Terracing is normal on most datum given the value ranges avaliable. This isn’t a lidar point cloud we are dealing with, but range distance readings of Mars. I doubt the datum is sub 1m.
next, if you just adjust the value range you can manually export a png raster that just works no matter what plugin you use. Despite the plugin being useful or not.
The height data contained in the raster layer is what is being rendered. Black to white 0 to 65536 range.
You can actually define your own range by adapting the layer as well. That becomes important since when you bring it to unreal you need to set the Z scale correctly.
Its even more important when you need to bump up the 0 in the maps to 6553/2. Normally earth 20m datum have sea-level at 0 val. You would have to shift that up to where unreal puts sea level to get proper heights.
Additionally. The map showed by OP as a single png16. Is 428,881m or 428km x 387km at a 1:1 size in px per meter thats 428881 x 387000 = 162,117,018,000 bits which is around 20GB
for a single png16 that won’t really fly. You can save it in geotiff to preserve the data. I have a 40gb one saved as such.
At OP, you need to cut the tiles up just like you would to bring it into the engine in world composition.
nip2 is the best way to do just that, but you have to save an initial image that’s the least compressed possible with the correct 16bit values of your liking.
not all formats support a 20GB file, so you have to pick one that does.