Every mesh has a optional meshblend size set. So you can have none, small, medium, large or extra large. The blending is based on that. It’s just that in my test level most things have some sort of blend size set. 
So some ground props can have large size, a table medium and the props on top have no size.
In that example the ground meshes would have a large blend, and the table would have a medium blend with the ground. And the props wouldn’t blend with anything.
It does take into account slope angles, world position etc. So the blending should feel natural even though it’s a post processing effect.