I think the fractals in TG2 are all smooth - which makes sense, as you usually don't want discontinuous surfaces.
If you want relatively hard edges, you can use a smooth step scalar after the power fractal:
<terragen_clip>
<power_fractal_shader_v3
name = "Fractal terrain 01"
gui_use_node_pos = "1"
gui_node_pos = "-880 1580 0"
gui_group = "Terrain"
enable = "1"
input_node = ""
gui_use_preview_patch_size = "0"
gui_preview_patch_size = "1000 1000"
seed = "54651"
feature_scale = "5000"
lead-in_scale = "25000"
smallest_scale = "0.1"
noise_octaves = "20"
apply_high_colour = "1"
high_colour = "1 1 1"
apply_low_colour = "1"
low_colour = "0 0 0"
colour_contrast = "0.5"
colour_offset = "0"
colour_roughness = "5"
clamp_high_colour = "1"
clamp_low_colour = "1"
apply_displacement = "0"
displacement_direction = "1"
displacement_amplitude = "2000"
displacement_offset = "0"
displacement_roughness = "0.875"
displacement_spike_limit = "0.25"
continue_spike_limit = "1"
adjust_coastline = "0"
coastline_altitude = "0"
coastline_smoothing = "30"
noise_flavour = "3"
noise_variation = "2"
variation_method = "2"
buoyancy_from_variation = "0.5"
clumping_of_variation = "0.25"
noise_stretch_XYZ = "1 1 1"
distort_by_normal = "0"
distortion_by_normal = "5"
lead-in_warp_effect = "1"
lead-in_warp_amount = "0.75"
less_warp_at_feature_scale = "1"
allow_vertical_warp = "0"
blend_by_shader = "0"
blending_shader = ""
fit_blendshader_to_this = "0"
invert_blendshader = "0"
>
</power_fractal_shader_v3>
<smooth_step_scalar
name = "Smooth step scalar 01"
gui_use_node_pos = "1"
gui_node_pos = "-700 1460 0"
gui_group = ""
enable = "1"
input_node = "Fractal terrain 01"
gui_use_preview_patch_size = "0"
gui_preview_patch_size = "1000 1000"
step_start = "Constant scalar 01"
step_end = "Add scalar 01"
>
</smooth_step_scalar>
<constant_scalar
name = "Constant scalar 01"
gui_use_node_pos = "1"
gui_node_pos = "-680 1580 0"
gui_group = ""
enable = "1"
input_node = ""
gui_use_preview_patch_size = "0"
gui_preview_patch_size = "1000 1000"
scalar = "0.7"
>
</constant_scalar>
<constant_scalar
name = "Constant scalar 01_1"
gui_use_node_pos = "1"
gui_node_pos = "-480 1580 0"
gui_group = ""
enable = "1"
input_node = ""
gui_use_preview_patch_size = "0"
gui_preview_patch_size = "1000 1000"
scalar = "0.001"
>
</constant_scalar>
<add_scalar
name = "Add scalar 01"
gui_use_node_pos = "1"
gui_node_pos = "-540 1520 0"
gui_group = ""
enable = "1"
input_node = "Constant scalar 01"
gui_use_preview_patch_size = "0"
gui_preview_patch_size = "1000 1000"
input_2 = "Constant scalar 01_1"
>
</add_scalar>
</terragen_clip>