Similar to Rene's issue, I cannot get colour surfaces to mask right on fake stones. Even in world position the colour isn't matching the displacement, and the colour is provided by the surface layer which has a offset to create the displacement. I exaggerated displacement so the boundary of colour is clear.
First image is non-world space, second is in world space. Both aren't aligning right. And the prior node is a Tex Coords so should be a issue there. I also tried "Better colour continuity" in my PF driving the Surface Layer mask.
It clearly looks better in World Space, but the colour is not covering all the surface displaced. Being just a normalized offset with no detail, you'd think the colour would just lift with it, not be pushed in any XZ fashion. I thought maybe the warping would be doing it after the surface layer, but that's not the issue either.
This is confusing.
Don't know if this work for you, but in my experiments with fake stones I always had problems with the Tex Coord from XYZ coming in through a child input
Have you tried putting a single Tex Coord from XYZ to the input to your Boulders Surface surface layer?
I'll give it a try, but it should have that information already from the Compute Terrain as there is nothing after it but the default Base Colour shader with no displacement.