So from my perspective it seems like you’re currently having issues with the terrain tool. For me I have encounter this type of situation but I don’t quite understand. But I do have a plug-in that could possibly help you, it’s called “Part to Terrain” for a short summary you can position your block at any angle & height and select your desire terrain option you would like to turn that block you’ve selected into, for example you can pick between a variety of options such as grass, water, rock, etc I hope that helped you somewhat. When I encounter that problem I actually had to position the camera angle in a weird angle with terrain in order to do what you’re typing to achieve, but I believe this plugin will make your job easier and maybe enable terrain lock I think is what’s it called, it might work!
Please Note
The terrain loads in 2 studs above I believe so if you would like a proper level, I recommend bring the block down you want 2 studs down before converting block —> terrain
This is not a bug. About a bit over a month ago the tools were changed so they only collide with the Baseplate of a place or Terrain. If you want it to collide with that part, you need to name it Baseplate and rename any other parts named Baseplate. For more details you can read the comments of this thread.