I have the same exact issue - Grass seem to blend with Rock instead of Rock replacing Grass on Blueprint Brush like in demo.
I played around with a bunch of different settings, but so far the only trick that sort of fixed the issue is in “Edit Layers” tab to set Layer Alpha to something very small like 0.01
This way Grass still grows there on the rock but not as much and Grass blending with Rock is pretty much invisible.
What I noticed is that in LandmassBrush settings (on the bottom) “Affect Weightmap” mark isn’t working.
Which seem to point to the root of the issue - Blueprint brushes don’t affect weightmaps.