It seems like you're just trying to displace a surface too much; you're going from a very small area (pre-displacement) to a much larger area and the renderer has a limit on how much it will subdivide the geometry (for performance reasons, to avoid runaway render times on rendering extreme displacement, etc.). The limit is reasonably high and most of the time it's not an issue, but it does seem to show up on stone displacements more often, possibly because they're at such small scales and being displaced more heavily often-times. So your intuition was more or less correct, and the solution would be to reduce the disparity between pre-displacement and post-displacement scales (so to speak), if possible. I hope that's clear (and accurate) enough.
- Oshyan