Compute Terrain is designed for use on a planet. You can use it on other objects, but when you do this the sides of the cube are like the sides of a planet. In these regions, the "up" vector is pointing along X and Z, not Y. So "lateral" means a different thing here. On a face that's pointing along the X axis, X displacements are vertical, not lateral, so they will be cancelled out if you use a feature that cancels out non-lateral displacements.
Furthermore, calculation of normals doesn't work well at the "equator" of the planet where the normals have a Y component of 0, and this is true on the sides of your cube. But I don't know if that's the issue here.