[Xbox Series X/S] Visual Downgrade - LOD Reduction

I wonder, is this because the system that reduces level of detail can’t be applied to third party add ons? I mean there is only so much you can do reducing detail in the distance if the area right around you is full of 3D models you paid for and rightfully should be able to use, right? Seems like this might be something the devs have to work with/are working with 3rd parties to sort out. Either the third parties need to optimize better or they need to be subject to detail drops when memory fills up, presumably.

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