This feature creates a soft transition between terrain materials and objects (e.g. rocks or tree trunks), which makes for a much more natural look. It hides the artificial looking hard edge between objects and the terrain.
Select the terrain material in the Material Editor
You can use the Pick Material From Object button in the Material Editor to pick the material from the scene.
- Enable Soft Depth Test in the Shader Generation Params.
- Tweak the amount of blending with Soft Depth Test Distance Ratio and Soft Depth Test Range.