You are missing the point …
A distance based Tessellation should not impact the performance when you are out of range, see the according Wiki entry:
This would make the whole distance based tessellation obsolete. Also the same effect when tessellation is set to zero.
We just want a close-range displacement for ground materials, which are being applied to a landscape. UE uses tessellation vertices that for.
I’m sure I’ve seen this working properly in previous versions.