Overview
The engine dynamically replaces 3D models with lower poly versions as you move away from them. This is usually completely unnecessary when playing on modern hardware.
What is Level of Detail (LOD)
[link]Level of Detail (LOD) is the principle of having lower-detail versions of models in memory and switching to them when the object is small/distant. This saves a lot of unneeded processing power at the cost of a not too big memory/disk size increase.
How to disable it
Right-click on the game in your Steam library, choose Properties, then Set launch options…, type +r_lod 0.