Happened to me, I just ended up avoiding that level of pitch on the camera. Interestingly, I only encountered it in ZH, not vanilla Generals.
If you look at EA's scripts, they use the 'oversize terrain by X tiles' quite a bit, what it does is attempt to increase the 'view distance' of the camera (for lack of a better description), effectively it overrides the terrain clipping so using it should prevent the kind of problem you have. EA used it to make sure terrain didnt vanish if their cutscenes were looking at or towards the edge of a map.
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