The virtual heightmap stuff is landscape only. There’s a screenspace based tesselation ability with the water plugin, but that’s still of course not really covering all the use cases for displacement maps.
What happens if you don’t want to kitbash, what happens if you want to use a lot of procedural meshes from Houdini or UE’s own spline and modelling systems? How are you supposed to make foliage and characters with the same detail level as nanite without it, especially as Nanite won’t cover those for a while, if ever.
Nanite is great, but hyper focused on one very specific asset class through one very specific art pipeline. Displacement would help a lot with all other cases, virtual heightfields too, so if tesselated displacement is going to be deprecated a replacement would be useful.