The default height map generated by the TE has white as 0 feet water and black as 0 feet land, with shades of dark and light grey as higher land and deeper water respectively. It also generates a second height map with black representing a minimum altitude of -1000 feet. I guess that when re-importing into the TE signed is used for the first type and unsigned for the second.
My assumption has been the altitude range is going to be -1,000 feet to +31,768 feet although I am not entirely sure as the displayed grey values used in the height files appear to be bugged currently. So I decided to do a test in the TE to find the maximum altitude of terrain that could be set with the "Set Alt" button. This gave some strange results when I set a terrain altitude of 32,768 feet or more. Instead of very high land the TE generates visually what looks like 1,000 feet deep ocean floor but that shows a Y value of 0 in the position box.
Thanks again for your software suggestions 715, I'd have never found Krita by myself.