Basically generating layers is very important to the end result of the map, obviously, and the current Terrain Builder refuses to do so at many settings that should be possible. It also gives no feedback what settings are wrong and why (apart from obviously impossible settings).

For example, my terrain settings:
Grid size: 4096 X 4096
Cell size: 7.5m
Terrain size: 30720m
Sattelite map size: 30720 x 30720 px (imported as 4 15360x15360px BMPs)

When I try to generate layers, it often fails/refuses to generate and just gives the error message: "Layers generation - Default satellite file doesn't exist."

With the above settings I manage to generate layers with a resolution of 2m/px (15360x15360px) or 1.5m/px (20480x20480px) but not at 1.25m/px or 1m/px

I have used these settings mostly but tried many others:

Tile size: 2048 x 2048 (tried several other sizes)
Desired overlap: 16 px (at my current "max" resolution of 1.5m/px this results in a 12% overlapped area which causes visual glitching in game)
Texture layer 30x30m