Although it appears that this question has been long resolved, there's actually quite a lot going on here (i.e. especially for such tiny question)--surprisingly lots!--so I'd like to outline everything involved so that, should anyone else have a similar issue, it'll be here for reference purposes.

I'll start with an edited down and more precise version of your original text:

It is reasonable to conclude that The negative contribution done observed during the adopted growing phase is was higher than it is was overall in the others defects because there were of incidences where the instances within that group (i.e., the adapted growing phase) for which entire objects were mis-classified as terrain. , which we is not (-or- cannot, should not be, etc.) expected by (-or- accounted for by, allowed for by, permitted by, observed in, explained by, etc.) the segmentation [alone/itself?]**

**(If I've correctly interpreted the meaning of this final, relative clause, then it should read more like this; if I'm not correct, you should consider removing it entirely because its meaning is unclear as it's written).

1. The primary problem with your excerpt is that it's far too verbose. I believe that, in trying to make your writing appear more formal and technical (which in and of itself would be fine/desirable), you've instead, in actuality, ended up sacrificing precision for the sake of that formality. It is entirely possible to have both.

2. First, to directly answer your question, I would not recommend using because of in a formal or technical paper. It is, at best, redundant. Merriam-Webster does indicate that because of is standard, but that does not necessarily mean that it's appropriate for your technical writing (i.e., you've got to be sure that you're writing for the appropriate audience).

   And second, because this is, in fact, technical writing, and because, as a result, you'd want it to be as concise/precise as possible, I'd recommend using only as many words as you actually need to unambiguously convey your meaning. I'd also avoid overly complex constructions, when, in fact, you can express the same thoughts both very simply and directly.

   Also, if you look at the definition of because, on its own, you'll see that it's defined as for the reason that/of, thus making the repetition of the word of completely unnecessary.

   It would sound more formal without of; and since your sentence is already on the long side, I'd suggest you omit it.

   And while M-W does list because of as first appearing in the 14th century, a quick Ngram search reveals that from 1500-Present, because has been by far more common than because of since the mid-to-late 16th century.

   Even if I adjust the time to from 1900-Present, it still shows because as being nearly three times as frequent. Because of has been increasing in frequency, but so too has because overall.

3. POV: I personally dislike formal/technical papers written in the first person, so I'd remove we as the subject of the final clause (you might be able to remove that last clause altogether). If, however, you'd prefer to write in the 1st rather than the 3rd person, you can; you'd just need to rephrase it as which/that we wouldn't ordinarily expect. It's far more important to keep your POV consistent throughout the entire body.

4. Also, you have a very, very, brief tense shift taking place in your example. You switch back-and-forth--almost unnoticed--between the present and the past. You'll need to decide which tense is more appropriate to use and stick with it throughout your paper. It is--in the right context--fine switch tenses, but I wouldn't in this example.

5. The expletive construction that you've used in your first sentence uses is more problematic, though. Expletive sentences--which usually consist of existential clauses--are constructed in the following format/order:

   Expletive pronoun (i.e., dummy pronoun) (i.e., it, there, who/whom[ever], that, etc. serving solely as a placeholder in the first word of the clause) + [conjugated form of to be] + subject + object(s)--in precisely that order--rather than the typical, active-voice, English construction of Subject-Verb-Object (S-V-O).

   Expletive sentences are existential in that they simply point to the existence of something, be they concepts, relationships, states of being, etc. Think of them as sentences that begin with giant arrows. The expletive is simply a pointing device of sorts.

   While it is OK to use that construction in formal writing, you should be careful how you use it. I think you can express this thought more directly in active voice instead. If it's possible to construct the sentence easily and straightforwardly without the expletive pronoun or existential clause, it's probably best to do so.

6. A quick word on which versus that: when you're using a relative pronoun: you should only use which for non-restrictive clauses (i.e. clauses that introduce non-essential information, which are separated by a comma, parentheses, em-dashes, etc.). Note that, according to The Chicago Manual of Style Online, 16th Ed., which and that are used interchangeably informally, because this is academic or professional, and because I'd be concerned about others perceiving that I'd made an error when in fact I hadn't, I'd avoid doing so. Per Chicago:

   6.22 Restrictive and nonrestrictive clauses—“which” versus “that”

   A relative clause is said to be restrictive if it provides information that is essential to the meaning of the sentence. Restrictive relative clauses are usually introduced by that (or who/whom/whose) and are never set off by commas from the rest of the sentence. The pronoun that may occasionally be omitted (but need not be) if the sentence is just as clear without it, as in the second example (before “I”).

   A relative clause is said to be nonrestrictive if it could be omitted without obscuring the identity of the noun to which it refers or otherwise changing the meaning of the rest of the sentence. Nonrestrictive relative clauses are usually introduced by which (or who/whom/whose) and are set off from the rest of the sentence by commas.

   Although which can be substituted for that in a restrictive clause (a common practice in British English), many writers preserve the distinction between restrictive that (with no commas) and nonrestrictive which (with commas). See also 5.220 under that; which.

   While a technical piece might be required to follow the APA Style, Chicago is a great comprehensive, general AmE style guide nonetheless.

7. And finally, I'd like mention that you should limit your use of prepositional phrases. While they can be helpful by clarifying/qualifying/quantifying your writing, too many will have the opposite effect.

The negative contribution done by the adopted growing step is higher than the other defects because of the incidences where the entire objects were mis-classified as terrain which we cannot expect by the segmentation.

If, for example, you don't specifically need to end the above sentence in by the segmentation, then don't. It's impossible for me to say whether that one clause is essential to the rest of the body of your work based entirely on two sentences. I'm not even sure that I fully understand the topic based on the limited contextual information available to me.

Only include it if you need to introduce the idea that segmentation is a factor. Otherwise, it's superfluous.