I'm assuming that this effect is only supposed to happen when you open a menu; but as I said above, any thing you do to a mob makes the side of clouds disappear. If you right click a villager or hit any mob including villagers the sides of the clouds disappear.
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Unable to reproduce, please provide some screenshots.
Alright, I put them in.

Cannot reproduce either.
Please force a crash by pressing F3 + C for 10 seconds while ingame and attach the crash report here.
Relates to MC-139.
Just Attached it.
I just found out that the same thing happens when you press f1 (or with windows 8 shift + f1).
I believe this is a bug with optifine, did you have it installed?
Edit: looked at the crash report, says is probably not modded, so probably did not have optifine installed.
I can't reproduce, is your minecraft modded?
No
Is this still a concern in the current Minecraft version? If so, please update the affected versions in order to best aid Mojang ensuring bugs are still valid in the latest releases/pre-releases.
No response for about a month, assuming fixed.