As stated @Krabworks here : Unreal Engine 5.1 Preview - #23 by Krabworks, a tesselation solution should incoming in X ue version (5.2 ? 5.3 ? more ? can’t said).
Otherwise concerning your issue, nanite is made to support super-dense mesh (without LOD and thing like that). So you totally should be able to have the same render than before with Nanite (and with better performance if we look only on the mesh itself).
So until the new tesselation solution is coming, using nanite is fine. You have plenty of tutorial on the net how to apply a displacement map on a mesh to apply the displacement in the topography of the mesh itself.