Terrain clipping... the red area shows where a lattice area has been auto masked so the result doesn't look like two big square terrain bases intersecting in the middle.
Yours is stuck. (your screencap is not shown but please take my word that it was hahahaha)
And no, it's not a dumb question. First time I did it drove me insane (er).
This is also where you would go to remove the bottom or top of a terrain (perhaps for a mesa/plateau).
Make sure it's solid!



You can manipulate the Clip Bracket and Gradient bar both to return it to 'normal' though getting the settings back this way takes a lot of time and patience.
I lack both...
SO you can take the easy way out and Alt+Left click on the gradient bar or clip bracket – whichever you moved – and it will reset to default ; )