Hello!
Yeah, sorry, the documentation is not complete yet.
The implementation in 5.6 should be in a much better state than 5.5, as it has been tested in an actual shipping game there, I would recommend trying 5.6 if you want to use the compression.
In 5.5, landscape.HeightmapCompressionMode overrides bUseCompressedHeightmapStorage - make sure you have those set properly in the comparison.
In 5.6, we removed the per-landscape bUseCompressedHeightmapStorage control, and that landscape.HeightmapCompressionMode works slightly differently, and is enabled by default.
The compression is on-disk compression, it does not change the size in memory (in a steady state).
When enabled, you should see smaller disk file sizes, at the expense of some CPU perf and a temporary memory cost to decompress the texture data when it is streamed in.
The smaller mips are not compressed, and you can control the mip level at which it switches to uncompressed data with landscape.HeightmapCompressionMipThreshold.
Some platforms with weaker CPUs are set by default to not compress any mips, as the CPU decompress cost was too costly.
Hope that helps!
-Chris