snoken said:
where 1 unit was 1 meter which is defined and agreed upon but if I now scale this terrain where 1 unit = 1 meter by 500, 1 meter would now be 500 right?
If you scale ONLY the models of the terrain, yes, that's true. It would scale all 3 dimensions to the new size and nothing would be changed around it. Any distance in any direction would be the new size.
There are many other systems involved, including all physics. There are 7 base units, and all physics constants and scales are based on those units. In the physical world, those are time (second), distance (meter), mass (kilogram), current (Amp), temperature (Kelvin), substance (mole), and luminous intensity (candela). If you start changing any unit you need to adjust ALL the constants and ratios to adjust. Games are usually only tied up around the first three, time, distance, and mass.
In Unreal Engine the base unit is centimeters instead of meters, and everything in the physics system has been calculated on centimeters. It's quite common for artists to import it once, realize that everything is 100x the size they expected, and the modify their modeling scale with centimeter settings. A developer could absolutely modify it to something else, like meters or feet or inches or furlongs or yards or rods or cubits, but by doing so they must also modify every constant and ratio.
If you have a physically accurate game simulation, all the rest will hold. If you kick a ball at 30 m/s, which is highway speeds, it should zoom away. If you launch a ball at 400 m/s which is faster than most bullets and faster than the speed of sound, that ball should travel the terrain at the expected rate, like a supersonic jet.
All the rest of physics should similarly apply. An impact with that 30 m/s ball would be as hard as a highway velocity ball smashing into something, and an impact with a supersonic ball would be an explosive faster-than-bullet impact energy.
Basically, all of it should remain intact.