Ever since the 1.12 update on MC W10, the sky has had this 'smearing' distortion effect where close to the horizon the sky replicates a distorted version of the surrounding terrain. Turning off fancy sky does not remove the problem.
Linked issues
Attachments
Comments 6
I'm also running W10 through a VM, so that might be the determinant factor (Xeon 6-core W3680, 24GB RAM, AMD 7950.)
Historically, the only issues I’ve had on the VM are delays with things being used, like taking 3 seconds to open a door or use a bed. No graphics bugs before this one.
Were you playing online or off? How’s your internet connection? Mine was super spotty yesterday and I even disconnected a few times.
My connection's solid and it's a Realm I own, so there shouldn't be connection issues.
I found a similar graphic issue on Youtube and their solution was turning AA off entirely.
FIXED IT. When you’re in-game, go to Settings-> Video-> scroll to the bottom and set the last option to on, and the slider above it all way down to 1. 😃

Thank you for your report!
However, this issue is a Duplicate of MCPE-31585.
Your additional information is very useful. Please add your hardware info in the comment section of the parent ticket.
Quick Links:
📓 Issue Guidelines – 💬 Community Support – 📧 Customer Support – 📖 Game Wiki
This happened to me yesterday after I updated to 1.4 and joined a Realm on a Windows 10 Virtual Machine. The horizon "smears" whenever another character moves or when I move my character’s camera/position. Does not happen while underwater, underground, or when standing directly in front of blocks (like a wall of sandstone or a dense forest); only happens directly on the horizon. Last I played Bedrock was March 29, and I did not have this issue. I have not updated the Windows 10 OS in several months.
Device (2017 MacBook Pro) stats:
Intel Iris Plus Graphics 650 1536 MB
Memory 16 GB