When I see an object, like a rock, in the distant land, instead of fading in smoothly, it looks stippled.

At first I see only a few pixels here and there.
When I get closer, more pixels appear until it's almost like a checkerboard pattern (every other pixel)
Eventually all the pixels will fade in.

This happens with or without shaders. Transparent things like tree leaves look fine once I am close enough.

What can cause this?

TIA

This is alpha-to-coverage that was introduced into MGE a while ago (around svn 163) for distant land fading. It's stipple based transparency but works at the multisample level, it starts looking better at higher MSAA levels. It can be a bit obvious without post-processing.