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Cerebralbore101 said:

It looks bad because it's unrealistic sharpness. Far off background objects should be blurry because that's how we see them in real life.

I can't stand ultra crisp shadows in games either. Shadows are supposed to be eitherial.

Yep, it's definitely hitting some kind of uncanny brain thing that our brains don't expect to see, feels really weird and like you said our brains must be asking what the fuck is that, it's looks real but it's not, somethings wrong here, alert! Alert! Perhaps depth of feild effects could solve this, they seem to have stopped using DoF as of late though.