The heightfield shader outputs *displacement* data, not color data, and the Density Shader (and Blend Shader) inputs operate on color data. You can turn on "Apply colour and shade" and then check "Shade by height", unchecking "Shade by light". This will make it also output color data where white is highest and black lowest. This color will be overwritten by your shaders later in the network, so you won't get undesirable effects on your terrain, but if you plug the output of the Heightfield Shader into the Density Shader input of the cloud layer, or the Blend Shader input of the existing Density Shader (then turn on Blend By Shader in its settings), then your heightfield should begin to control your cloud distribution.
There are a few things to know when doing this. First, the area of the generated heightfield will contain shades of gray, white to black, by height, however the area outside the heightfield is considered black. Thus clouds will show up in a square inside the are of the heightfield but nowhere else. Second, you will probably want to use the Blend Shader input with the existing Density Shader so as to give yourself more control and natural-looking cloud shapes, rather than *directly* driving the cloud distribution with the heightfield. You may need to increase "Coverage Adjust" in the Density Shader to get many clouds to show up. Third, if you *do* use it directly as the Density Shader, you'll probably need to increase the brightness of the color output beyond 1 in order to get anything to show up in the clouds. Try a value of 5, for example. But as I said I recommend plugging it through the existing Density Shader.
This method may not actually get you what you want, but it seems to me as if it accomplishes the request in your original post at least.
- Oshyan