There’s no problem having a static mesh that cuts into the landscape, but of course yes it can create a visible seam. I would suggest finding a place where there is a natural break, and switching from landscape to static mesh there.
I think I would put the break at the point where green turns to brown in your diagram (but I would do a little bit of landscape rock, so it’s easier to get them overlapping right). The cliff face is going to be angular with many fracture lines where the rock has fallen away. One more fracture line won’t show.