OK, it’s been a while without any updates, so I’ll try to let you guys in on what I’m doing now:
caner_ozdemir posted a novel iterative parallax solution (found in this thread: POM material - Rendering - Unreal Engine Forums ), and I wanted to get it working with my system. If it can be integrated, the results would be the same as the standard bump-offset parallax displacement, but without any artifacts at all. Unfortunately, just as I expected, the ability to tile a ton of different assets over each other at different scales is coming in the way of this being a good idea. Parallax occlusion mapping currently is supported, but not recommended for glass or metallic tiles. The iterative parallax was made into a material function. I tried making parallax occlusion into a material function, but for some reason I’m having trouble referencing a texture object inside of it. Again, check out that thread if you’re interested in these new developments. Daniel W responded saying there will be a new material node coming in 4.8 to push pixels in with depth so parallax occlusion materials can perform post-process ambient occlusion and shadow correctly.
In the meantime, I also implemented a custom Ambient Occlusion map if you want to have nice AO textures working with this system. Stay tuned for further updates!