In that pg example, yes the physics height map surface is misaligned with the visual mesh surface:
You can see that by looking at the corners where dotted lines don’t match the visual surface texture. Either the visual mesh, or the physics height map object need to be rotated and probably have an axis flipped.
That said, I’m pretty sure the debug drawer is still properly drawing the surface of the physics objects.
Disable the ground visual mesh, and you’ll see the spheres do not pass through the actual physics height map:
There is something funky going on with that surface misalignment though, I never did take the time to figure it out.