This engine works from cell to cell, even in the free roam engine games such as Oblivion and Morrowind they work the same way but have much more complex coding to allow the sense of Seamless movement. Also distance views and various levels of detail in all of the models to give more detail as you are close and less when you are farther away help with those illusions but with the exception of some extremely demanding engines such as those that create the Gothic game series and have very large areas, game engines need to deal with small zones. Otherwise it just gets too complex.
What happens in many such free roam games, as your avatar moves about, the engine "draws" or creates a zone around you of visible reality, and it uses minimal models or what are called sprites, 2 dimensional cut outs for distant shapes that are switched for more and more detailed LOD versions of themselves as you approach them or as they approach you. But all the while the game engine is keeping track of everything by its 'address" or unique location, and something like an island in the sea would be quite complex even all by itself as it would have its wireframe mesh, then the texture for that, and the vegetation, and its dynamics, any other environment factors, then the walk mesh, see below for that, collision on the landscape, and or veg, useable or moveable items if any, quest triggers and goal zones, hot spots, access points, and much more......
Especially when the player character is connected to or 'on" a vehicle or other moving entity. That is almost the most demanding situation for 3D engines, as they have to code and "run" both the player avatar and its movements and POV (point of view) AND those of the vehicle which is moving thru time and space ...and both are moving thru the various zones of the 3D environment. It can get the most challenging in some of the MMORPG game or sim environments where you have hundreds of persistent ie permenant but changing avatars such as Second Life, World of War Craft or Blue Mars. Such sims demand many billions of lines of code.
This engine here is quite robust but it appears from what the experienced mod teams say that it has its limits.
Just to throw in a new variable, when you create a free roam environment, you must along with the landscape add physics, collision, (what is solid and what is not), and walk meshes (coding that tells the moving avatars ie characters where they can go and where they cant).....and if there are triggers, or actionable items that the sim or game allows you to interact with that takes coding and then those factors can change if you can manipulate, use or even more demanding, pick up and Keep and then re use such items. In games like Oblivion by Bethesda, who actually created the first of this series of Pirate games, Sea Dogs, the coding is remarkable for you can use and store and change hundreds of items, and modders have created many thousands of new ones.
So it is not possible to achieve here what you are thinking of, tho it would be nice indeed. It is remarkable what IS possible here and I continue to be amazed at what the ingenious and determined mod teams have achieved. Hope this helps explain a bit more of this.