The error is a scalar quantity. At short distances outside the Max map size (represented as a yellow box in World Comp.) the error values will be small.
As this distance increases, so does the error.
For example, at 40074.28 Km (real earth size) this error is about 2Km. Any coordinate value calculated at this distance can be 2Km off in your absolute world position.
Things like teleportation and ai can often resolve to the wrong location. The magnitude of this depends on the specific calculations involved.
To my knowledge, the “Z” parameter is not controllable.
(at least not without a lot of handling code)
However the engine is equipped to handle the x,y situation in several ways.
The method in the original post is designed to be used with a single master server.
The option in the world settings is primarily for use with single player games, or local multiplayer networks.
The “industry standard” approach uses neither, and instead implements independent servers for each landscape tile, and another dedicated server to handle the transition between servers. On the client side, world origin shifting is not used, instead this is handled by the level streaming properties, and location information is passed through the dedicated server (which translates which landscape-tile server the player is “in”) and assigned to the appropriate server on the list.
This generally requires several people with multiple skillsets and knowledge in the engine back-end as well as IT and networking technologies.
OR at least one legacy programmers (from back when all these microtasks used to be one job).
The decision of which of our 3 choices (or other choices depending on your requirements) is going to be based on the number of intended players, the size of your map, and the capacity of your dedicated server network.
In any case, there is a basic understanding that must be gained in terms of how each solution is to be implemented, based on your particular set-up.
When writing your code to handle coordinate translations, you often need to scale this to the actual size of your landscape tiles (total distance +/- X and Y) not to the limiting distance of the engine. The exception being a tiled landscape set to the actual limiting value, in which case the numbers are the same.