I think you could produce the same effect without worrying about overdraw/sorting and without translucent materials:
1. Render the terrain to a separate buffer
2. Copy the terrain's depth buffer to the main depth buffer
3. Render all non-terrain objects normally
4. Smoothly blend the terrain buffer into the main buffer based on depth
This sounds similar to the method used in BotW, but allows for depth culling since the terrain is rendered first.
I'm not familiar enough with Unreal Engine shaders to attempt making it there, but I made a demo in ShaderToy: https://www.shadertoy.com/view/ct3SDN
1. Render the terrain to a separate buffer
2. Copy the terrain's depth buffer to the main depth buffer
3. Render all non-terrain objects normally
4. Smoothly blend the terrain buffer into the main buffer based on depth
This sounds similar to the method used in BotW, but allows for depth culling since the terrain is rendered first. I'm not familiar enough with Unreal Engine shaders to attempt making it there, but I made a demo in ShaderToy: https://www.shadertoy.com/view/ct3SDN