I was going through my entire material setup to pin point what is really making my level lose so much FPS. I am now surprised to see this. I have put this simple setup below to demonstrate the issue.
Created new material and applied to landscape.
Notice the FPS.
Now I check flat tessellation. Notice I have not tessellated the landscape yet at all. Nothing connected to pins. Wireframe also shows landscape is not tessellated.
Notice the FPS.
So basically the landscape is not tessellated yet (yes I have checked wireframe) but I lose 70 FPS for nothing. ...?
Just because it isn't tessellated, doesn't mean it isn't doing anything. Often, activating features like tessellation have an initial cost, and then potential costs after that. With that said, it could be a bug, report it over at UE4's help forums.
Yeah, just enabling tessellation can cause a big performance hit, especially if you already have lots of subpixel triangles which it looks like you do.
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