Terrain Tessellation is applied to Layer without Tessellation

I have 2 Layers:
Grass and Cliff, both implemented as Material Functions which return MaterialAttributes.

However, The Grass has a Tessellation Multiplier of 0, while the Cliff has a higher Multiplier.
The Tessellation is reduced with the Distance.
((CameraPosition-WorldPosition)/Distance etc etc)

However, the Grass gets tessellated, too, even though it has a Value of 0.

Not sure 100% if this is your problem, but when you’re painting layers you’re basically “stack” them and not overriding. If you had cliff layer as base layer and then painted with grass it still has both layers. You can erase layer by holding shift while painting.

My Material looks like this:
Changing the Order of the Blend (Top<->Base) results in no tessellation at all.

I meant painting on Landscape itself.
If at any point you painted Landscape section with Cliff layer and then repainted with Grass layer - you still have Cliff layer underneath so tessellation value from Cliff applied as well as from Grass. It might look like Grass, but actually it Cliff + Grass. To remove existing layer from landscape start painting on Landscape, choose Cliff layer and “paint” it with shift.

I’m painting grass only.
Cliff Layer is applied automatically.

That’s definitely your problem then, you have to change your material setup so Cliff won’t be everywhere by default.