What's happening here is you're applying negative displacement using the Painted Shader, which lowers the terrain into a canyon-like area, but it does *not* remove the existing displacement - it just moves it all "down". What you probably want to do is *mask* the area by a Painted Shader. You could do this by plugging your existing Painted Shader into the Mask input of your terrain shader(s) and then apply *invert mask*, or use a Complement Colour node after the Painted Shader, before it goes into the mask input(s). "Complement" is basically the inverse, so it's the same thing as checking "invert mask", but you don't need to apply it to every shader mask input you plug the Painted Shader into.
Anyway, if you do it that way you'll basically "remove" the terrain where you paint, but it won't be displaced downward yet. So you could then add a Displacement Shader and feed the same Painted Shader into it, and use negative displacement to get it to displace downward. You should then end up with a much more flat-bottomed canyon, which you can add further detail to, for example use the same Painted Shader as the (non-inverted) mask of another Power Fractal, which will then only displace the canyon area itself.
- Oshyan