Hi Mick,
TEX coords from XYZ is part of the "compute" nodes present in TG.
Here's what these compute nodes are about:
Compute normal = compute the normals of the surface (allows for slope restriction/masking)
Compute terrain = compute the normals of the surface + compute texture coordinates (allows for slope + altitude restriction/masking)
TEX coords from XYZ = compute texture coordinates (allows for altitude restriction only, since it only gives a position of a surface and not its normal)
The reason you use compute terrain after creating your terrain and/or displacements is that you want to update the renderer with fresh info on the normals of each face, but also the coordinates of these faces for texturing, so that the textures align with the displacement.