I figured a method that works ok but the above screenshots were in 5.1 built from source from github before it was released. Unfortunately Nanite displacement is only working for foliage, there are issues with shadows and self occlusion that make it impractical for normal meshes.
I was hoping to see a full implementation of displacement in 5.1 for the final release, but unfortunately that is not what was released. My understanding is that this works well for foliage because foliage is full of holes and does not easily self-occlude.