Thanks for the screenshots.
So, first of all, you’re using tesselation which dynamically subdivises the landscape geometry in real time to be able to displace it with that kind of details.
World position offset doesn’t do that, it only takes the initial geometry and landscapes have very basic geometry, like 1 vertex per meter by default. Trying to displace details of the scale of a rock with it will not work. You probably did nothing wrong when switching to world position offset, you just can’t see the effect since the geometry is so low res by default.
Unfortunately, as I’ve said, tesselation only occurs on your GPU. It will not affect all the stuff that happens on the CPU, like collisions. It is a known and common limitation of this system and to my knowledge there’s nothing you can do to bypass it yet.
I’d say you’d probably want to switch all those bigger rocks to a static mesh so it can has collision and keep the tesselation for smaller details.