I think that’s just it… in order to accommodate the wide range of hardware this sim may be run upon, they have implemented graphics (and other) option sliders and enum selections so you can tune the sim to a level that you like that also balances with what your hardware can handle. High-end rigs can handle more, so why not allow the sliders to go higher to utilize that extra available horsepower.
My guess is that they had to implement a lower level of terrain (and object) LoD to make the sim work on lower to mid-range hardware. The compromise is that you can’t have high levels of detail loaded into precious VRAM that doesn’t exist on said lower to mid-range hardware. The result is that terrain morphs (and object pop-ins) at closer distances with the LoD settings being lower.
They (presumably Asobo) tried to mitigate some of this by implementing the culling of memory that was introduced at X-Box release time. This however, had the unfortunate (and intended) side effect of textures and objects being thrown out when they were not in view and thus had to be re-loaded when the view changed. It really sucks when you have TrackIR or a Tobii eye tracker.
The “hack” fix for it now is to go into the UserCfg.opt file and manually increase LoD values above the 2.000000 limit set by the sim’s GUI. The higher you go with these LoD values, the more VRAM is used. Someone did an experiment on this going all the way to 9 on the terrain LoD and showed that in fact the VRAM increased with increased LoD values:
https://forums.flightsimulator.com/t/lod-at-9-22-5-gb-of-vram-usage-on-3090/451104
If they allow a higher limit for this slider in the GUI, everyone would be free to tweak it to their heart’s content to find the sweet spot for acceptable FPS vs visuals that their hardware can handle. The sim can’t add VRAM to your system, it can only try to optimize how it uses the available VRAM. And IMHO, they’ve done a pretty good job at this optimization in the latest release.