And I always have my render distance set to its maximum setting, so I know I used to be able to see farther than I can in this screenshot.
This literally just happened to me. I was traveling with my horse, the game crashed, and when I reloaded the world, my horse no longer existed.
I didn't realize this affected other people as well. I thought I was going crazy.
I can attest to this. I try applying it to myself with commands, and suddenly I'm unable to punch any mobs.
They also seem to do this on the smaller coral plants.
Whether this is a bug or not, it single-handedly kills any large scale builds as they are not able to be seen in their entirety with the fog so close. Never have I been so unmotivated to play the game.