I can confirm that it is not fixed in 1.2.3.
This is a Shilka. (Well, the black speck in the middle of the 100 times larger muzzle flare is...)
At some distance, a new lod texture takes over, which is MUUUUCH too big.
EDIT: Now, the lods of standalone DCS A10 (while not perfect) do not exhibit this behaviour. Mustang, or someone, if you know where the relevant files are, could you either show me so that I can try replacing them for the standalone files, or try that yourselves? Thanks!