1) Looking back at the original world pic you posted, I do believe that there was some terracing applied before erosion there. The key, however, is to mask the terracing so that the ledges only occur in certain places instead of everywhere.
2) Channeled-type erosion will especially carve gullies that run the entire slope of the terrain -- changing your erosion mode can help remove that.
I've attached a slightly modified version of your world showing those two changes below. Note that I'm also showing the sediment mask instead of the flow mask -- this is more likely to be what you want.
It's also not necessarily unrealistic at all to have erosion gullies that run from near the top all the way down to the valley floor! For example, here's a real world image of Mt Stuart near where I live that I took last summer showing the gullies I'm talking of:
And then the output of the modified example showing a similar erosion style:
Thank you both for the reply but couldn't do it. There is also a second issue I'm going to show you plus explaining more on the first problem.
The second problem is the length of the erosion. Red is so unrealistic where erosion starts from top and goes down on the ground level. Blue is what I'm after. Below is an example of what I mean:
The erosion starts from top but doesn't go down to ground level and yet the ridge is steep and there are snow variation among the rocks. (grass in pic of OP). In my wm file erosion goes as long as steepness goes. Currently my WM image you see in this post is just lines lines and more lines. where I'd need grass etc. to have some variation along the erosion like the image in the OP.
I attach the WM file here if you can do what you mean I can take a look into it and understand better. Thank you.
I agree with JakBB, erosion usually works best when it's working with an underlying surface that has a rough/textured surface already. Trying to directly erode a sketched shape will probably produce a lot of straight-line-erosion results. Applying fractal noise to your guide shape usually works before the erosion usually works much better!
I guess your problem is you're relying on the erosion way too much, try and experiment changing some parameters on the erosion device, also I suggest you to feed into the erosion device a very detailed terrain, with lots of variations on the slopes...
I'm not sure if the title is right but here's the question: Usually when I make mountains its eroded from top straight to the ground. meaning if the slope at top starts with 45 degrees it also ends that way, therefor unrealisticly only rocks and suddenly grass for example. I found this image over reddit and this is exactly what i want to make. notice many green between the mountain top and bottom part of the mountain. Its not all rock from top to down. i try terrace before eroding but thats not it.