It’s the terrain geometry getting more complex as you get closer. It’s a similar effect as when you see texture or model “pop in” in some games.
The farther you are from mountainous terrain, the less polygons FS2020 tries to use to save on GPU/CPU resources. I do agree that the effect is too noticeable and sometimes it takes for you to be extremely close to a mountain for the geometry to change, so yeah, it’s badly implemented.
This is something different than what the OP is reporting. This particular issue with spiky terrain popping up and disappearing after the last update has a separate thread. Go and upvote it.