While I do think this is a result of the LOD system, in this case, for future reference, if you encounter bugs, you should send Tech Support a report. While the REDs do indeed read the Forums, they do so in their spare time, and are volunteering their time when they offer assistance here. By sending a technical report, your concern is directed to the appropriate department, and thus has a far better chance of being examined, and resolved more efficiently.
There was an argument on r/witcher about supposedly decreased draw distance and the guy showed similar screen-shot as a proof. I went to check this out and this particular texture was indeed bugged. Others claim they saw it on 1.08 too. I have no similar problems with other objects, so I suppose one of the low-res textures for this one is bugged (or missing).
Of course, I made sure my game files are not corrupted and I'm playing on high settings.