Okay so I've gathered more information about that bug. I'll detail all infos I could gather so far and will edit this post as needed so that if users google it up, they'll at least find something. Mirh, I tagged you to know if you think it should be added to unresolved issues. Regardless I will trim down the fat on FC2's entry soon.
First off, here's a video I actually recorded a year ago while working with Hunter on his Redux mod. At the time, I suspected it was a Near clip plane issue due to editing the FOV. Please watch it at 720p60, or you'll miss it: https://youtu.be/PAlhZzm0ocs?t=55
Second, I'll break down everything we know and possible leads below, and upload a savefile with instructions if anyone wants to replicate it. Here's what we know/have tried:
1. The issue occur in DX10 mode, by combining HDR and Bloom. HDR is enabled by default on DX10 and can only be disabled in GamerProfile.xml and set it to read-only - of course, the game looks vastly different that way. Modded Patch.fat/dat or Dunia.dll do not change anything, it'll occur anyway.
2. Multiple experienced modders confirmed, by replicating it using a provided savefile or just by stumbling upon my research on the Far Cry modding Discord that this bug is years old and can easily be replicated. The bug is not contained in said savefile however, I tried a new game, all vanilla, same deal.
2. I can confirm that it is CPU and GPU vendor agnostic. The issue occured on a i7 7700k/GTX1080ti rig as well as on a R9 290x rig. My own PC is a R5 1600x/GTX1060 6GB. All those tests were done to replicate the issue on purpose, and were conducted on Windows 10.
3. The usual suspect have been ruled out: turning off "game mode", clean boot & reinstall, run as admin, with and without Reshade, using "disable fullscreen optimization", disabling color correction in the Nvidia control panel and leaving it to the application, cleaning related entries in the registry, installing on the C:\ drive, enabling/disabling each and every settings, even reverting my overclock and downcore my R5 1600x to two cores.
4. We suspected that it may come from WDDM. I tried installing the game on a AM2 Athlon 64 X2 4400+ & GT430, Win 7 rig. Same thing as on Win 10. We did not try on Vista/XP or on AMD APUs & Intel iGPUs.
5. We were not able to pinpoint the issue for sure. Special K, 3DMigoto and RenderDoc do not work with DX10, so I cannot take a look at what's happening. However, black squares appear when ADS when looking all the way down on road that have parallax, sprint through grass, or look at water. In those cases, it seems that the Adaptive Bloom, which correct the exposure of the screen, "misses" a part of the screen - so, mostly things that use alpha blending.
6. The Steam and GoG versions are affected, both being version 1.03 (last to date).
7. We can unpack shaders, and get compiled .pso & .vso. I do not know how to edit compiled shaders apart from Hex editing, which isn't my strong suit.
All of this pretty much narrow the issue down to Windows past 7 and up, or Ubisoft broke something when they introduced the Widescreen patch (1.01 I believe).
Of course there's few chances that it'll ever be fixed, but for archive purpose it's there.
Attached to this post is a savefile if you want to help out. It takes about a minute.
Launch the game in DX10 mode, set everything to ultra and enable Vsync (the squares are smaller the higher the framerate is, this is because the frame buffer is cleared every frame). Make sure Bloom is ticked.
From where you spawn, go to your left and follow the road where the jeep is. That road has parallax. Go near the end of it by sprinting heads down, you might see those squares already. At the end of that small path, still on that parallax'd road, ADS with the AK, look all the way down and turn around on yourself. You should see black squares covering the back of the AK.