Would probably be safer to wait until a “less alpha” version of nanite for landscape is released instead of messing with Z scaling.
Stair stepping is often the case of missing data.
Its possible the nanite system is oversimplifiying the heightmap or the point positioning.
Op points this out - almost as if the heightmap has been compressed -
It probably has. If not directly, by the point precision of the nanite mesh throwing things off.
If you really are in a rush for whatever reason, nightly github releases have the most current version of the engine. You can compare what was released then, vs what work they improved on.
They really need nanite to work to make landacapes viable, otherwise their whole engine is pretty much a wash.
Eventually, they will patch this up…