Wrong. It CAN be done. I have made different, standardized battle maps for my Civil War mod, including one that was swampy. Using the UE, change the "Water Level" for scn_random_scene to a positive value, type "none" into the box for mesh and the box for texture, uncheck all check boxes except "generate terrain" and "auto entry points", and then start Mount & Blade in edit mode. Click the terrain button on the game's taskbar, and set the sliders to no hills, a few valleys, however much vegetation you want, and a good bit of ruggedness. Then generate the terrain, and copy and paste the terrain code from Mount & Blade into the "Terrain Code" box in the UE. Then after saving your work with the UE, restrt the game, and you should have a swampy battle map. It worked for me. Make the water level higher until you get satisfactory "islands".