The distance looks almost misty/pale in color

Thank you for your report!
However, this issue is Working As Intended.

The behavior you have reported is working as intended: Please refer to the 25w19a and 1.21.6 changelogs, the latter of which is quoted below.

Fog

• Fog was tweaked for improved atmospheric perspective

Shader Fog Changes

• The fog is now split into environmental and render-distance-based fog

• Environmental fog is supposed to represent the "fogginess" of the environment the player is in

  • e.g. lava, water, and now also atmosphere

• Render distance fog is supposed to obscure the border of visible terrain

Please note that mechanics of the game may change between updates.
Things such as graphics, sounds, world creation, biomes, redstone, villagers, and animals may not work the same in current versions.

Full Version History – Snapshot Version History – Feature Requests and Suggestions

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