I agree with you on that.
Also I cannot speak for anybody else but I personally only want Tessellation in order to smooth my skeletal meshes. Its really tedious having to manage 2 different versions of a character skeletal mesh (one low poly for animation and the other a high poly representation for unreal) when I could just use the low poly mesh and Tessellate it in UNREAL. Even if Nanite eventually supports WPO (I think 5.1 actually does) or skeletal meshes, there is no telling if things will work the opposite way later on down the line, with NANITE being able to add in triangles and do surface smoothing as well.
Following the release of UE5 EA however, I actually figured out how to deal with the terrain issue. I work in Blender so its really convenient for me but I don’t see why what I’ve done cannot be replicated by someone else using their own preferred 3D modeling tool.
My solution may not help people who’s workflows are confined only within UE5 though, and when I suggested what I had discovered to people last year, I was told that this is just too many steps.
But I couldn’t figure out any other way to do it 
And maybe people have come to this same solution already? I don’t know… What I do know is that you cant get good results just popping open an external program, painting some textures on a mesh and calling that terrain. And the “baking out” nonsense as some have suggested is ridiculous PS2 era stuff resulting in you losing a bunch of texture quality. You would also be forced to displace evenly across all surfaces of your landscape which is not realistic from a visual standpoint. The way that people are suggesting everybody do this takes the creativity out of every aspect of building your world.
Having to stack a bunch of meshes on top of each other just to create simple dirt paths, puddles or small patches of land is INSANE! Its WAY more time consuming than how things were before where we just painted the land variations. I have no clue why someone would think that something like this is even a good idea or convenient for an artist because its not.
Anyway in order to make this work I needed more flexibility than that and also to be able to take advantage of NANITE as well. This means that using color channels is essential which is exactly what I did here: Custom Terrain Using Nanite With out Tessellation