I see a list of size recommendations, and a section on performance.
Performance Considerations
The choice of component size vs the total number of components is a performance trade-off. Smaller component sizes allow quicker LOD transitions and also allows for the occlusion of more terrain, but the smaller size necessitates more components.
Each component has a render-thread CPU processing cost and each section is a draw call, so try to keep these numbers to a minimum. For the largest Landscapes, Epic recommends a maximum of 1024 components.
But I can’t find any real information of the costs and benefits smaller components vs larger components and world composition.
the more components you have, the more draw calls there are. think of it as each component being a seperate object.
larger components have fewer draw calls, but it also means there is going to be a lot less LOD-ing as each component is bigger and needs to spread its LOD over a larger area.
If you have a very flat landscape, use larger components as you can then start out with fewer detail in each component and the LOD-ing becomes less of an issue, and because the landscape would be so flat, you wouldnt want lots of smaller components as you would be seeing lots of them at a time, which would increase the draw call cost.
for a very hilly or obstructed landscape, you want lots of smaller components. this is because you can cull out the components you cant see, which increases performance, and because they are being culled you dont suffer from draw call issues. because the components are being culled so well this way, you can increase the detail in the landscape without much performance cost.