There was an error in your setup, but that didn't affect anything (you had one fake stone layer as merge controller, instead of 'shader A')
Ok, here it is:
You have a fractal terrain and to that you add fake stones.
However, the data-flow doesn't provide information from the compute terrain where the fake stones actually have been added.
Both terrain and fake stones were calculated at once and share all the same coordinates.
This results in a misalignment when you use the fake stones as a blendshader downstream in the network, since the fake stones at that point weren't supplied with proper texture coordinates and normals, yet.
I'll try to explain, but it's a bit hard to do that easily, so I'll do my best
What you need is to create 2 stages, as follow:
1) create terrain and compute
Now the terrain has been calculated first, providing base texture coordinates and normals to perform proper masking on for altitude and slope respectively.
2) add fake stones after the computed terrain fractal
These fake stones are now created onto the terrain which has properly calculated texture coordinates and normals as a base.
The resulting texture coordinates and normals will align with the base terrain.
3) compute again
Because the stones are separately added the compute terrain will update the texture coordinates and normals with the data provided from the fake stones.
Now the terrain and fake stones are "merged" as final* texture coordinates and normals of the terrain and thus will align properly.
In other words: because the fake stones addition is calculated again the program is now aware of the difference between the terrain and the added fake stones when you use the fake stones as a blendshader downstream in the network.
(*final: in this case NOT the same to final position/normal as seen in the distribution shader. Final position/normal is the state of the data stream when computed in the planet node)
4) shade and/or blend for fake stones
I'll read this message again a bit later and try to make it more clear.
Anyway, the images speak for themselves.
Mask_stones_misalignment.jpg shows what happens when you do not calculate everything separately. As you can see the white colour is misaligned because it follows the terrain instead of the terrain + fake stones.
Cheers,
Martin