It does subdiv the existent, but since the innitial surface is one big quad, the amount of tesselation would be lower than on that sphere or cylinder, which would mean you need a higher multiplier… which is heavier for the engine.
So its good to try and keep an even amount of quad polygons on your mesh so the tesselation only needs to tesselate… and not also divide large quads before it can really add the heightmap awesomeness 