Depends on what the game is like. Due to the LOD system, players with low graphical settings might end up seeing objects through terrain. This makes it infuriating for genres that rely on sneaking or shooters as you either end up getting a built-in ESP or shooting at something that looks like a clear shot, but there’s a small hump of invisible terrain in the way.
As for the performance, smooth terrain is very well optimized and the difference will be almost negligible. Loading times might be a bit longer though.