One thing about just setting the blue channel to one is that when the engine normalizes the normal vector, it’s going to mess with the red/green magnitudes. The result is that it will likely wash out the normal map to some extent (especially on highly curved surfaces). The fix is to adjust the blue magnitude so that the normal vector remains unit length. However, this involves taking a square root which may or may not be expensive. I’m not sure so I avoided doing it.
One other consideration I had was that I needed the full 2048x2048 texture on both the normal map and alpha mask. I didn’t want to use two separate textures due to their size, especially since the second texture would only be using 1 channel.