Ok, I have a good idea of what the issue is now. World Machine terragen format import was only tested with TG-generated terrains, and it seems to be the case that other programs that export to TG format produce output that WM doesnt expect.
The crease is the result of interplay between a 2^n sized terrain (256, 512, 1024, etc) and a 2^n + 1 terrain (257, 513, 1025,…)
Terragen format usually is 2^n+1, and WM is expecting a terrain in that format. Although it usually can sense when that isnt the case, I suspect somehow that’s getting fouled up here.
I would try two different workarounds.
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You could try loading the terrain into Terragen and then resaving it from TG. WM usually works fine with TG-created terrains.
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Try creating a 2049x2049 terrain and importing that to WM, and see if it works.
Let us know if either of these works!