While the Unreal Engine 2.x terrain heightmap data is stored in the notoriously finicky and general image editing software-unfriendly format of 16-bit greyscale, someone, Martin Bell to be specific, did develop - and gradually improve on in subsequent versions - a program that allowed some rudimentary operations to be performed to the entire heightmap, outside of UEd's more localized terrain modification tools. The program was called G16ed and was hosted on Bell's own site, which is now defunct, but you can get a copy of its latest version (v1.46) from the ever-lifesaving Internet Archive here, and a few extra helpful notes from the BeyondUnreal Wiki here.
For quick reference, here's the latest version's list of main features, straight from the download's readme file:
Once you're done using G16ed to adjust your heightmap the way you want it, getting its texture (and/or deco) layers altered in a corresponding way should be a lot more straightforward, as, IIRC, those are stored as DXT5 images that can be easily extracted from the map's myLevel'd textures, processed in any image editing program that can import and save in the DXT format family, and re-imported back in the same place via UEd.Main Features:
- Rotate & flip all/sections of heightmap.
- Easy ramp creation.
- Cut/copy/paste/crop sections of heightmap.
- Import raw data (8/16/24/32 bit big/little-endian), 8-bit greyscale bmp.
- Export raw data (8/16/24/32 bit big/little-endian), 8-bit greyscale bmp.
- Resize heightmap to specified dims.
- Add/Replace/Subtract fractal noise to selection.
- Multilevel zoom with mousewheel.
- One level undo.
Hope that helps. Now, if you'll excuse me, I desperately need to go looking for a turnstile because I absolutely do not want to keep moving backwards and relive the nightmare that's been 2020.