If you have 4GB of VRAM in your GPU, the game engine does not handle it correctly. It can cause an insufficient amount of memory reserved for textures, resulting in high quality textures never appearing.
The game engine calls IDXGIAdapter::GetDesc, See https://docs.microsoft.com/en-us/windows/desktop/api/dxgi/nf-dxgi-idxgiadapter-getdesc, and uses the DedicatedVideoMemory value to determine the amount of memory to reserve for textures in its GFXStreamableTextureManager class. See https://docs.microsoft.com/en-us/windows/desktop/api/dxgi/ns-dxgi-dxgi_adapter_desc
In the game engine, the DedicatedVideoMemory value is a SIZE_T, which can hold 64 bit values on 64 bit systems. Unfortunately, the LiF game engine mishandles this value as a 32 bit value resulting in an integer overflow.
If your graphics card has more than 4GB or more, this game engine bug will reserve the wrong amount of memory for textures.
In my particular case, my GPU shows exactly 8GB (0x200000000) in the IDXGIAdapter::GetDesc API. The game engine converts this to a 32-bit value by ignoring the high bits, resulting in 0 VRAM (0x00000000), so the game's texture manager initializes 0 space for textures. The result is that the high quality textures never pop in. The game log shows Out of Texture Memory errors as a consequence.
Screenshot: https://i.imgur.com/zMog3GF.png
Game log on Low settings: https://bpaste.net/show/0def78236775
Game log on Ultra settings: https://bpaste.net/show/b69bdbdcb37f
ECHO 2018-08-23 16:38:38.059 {} <<Thread>> [] GFXStreamableTextureManager initialized. Texture memory budget: 0, memory warning level: 0 [T:WorkerThread0:0x865E2C8]
ERRR 2018-08-23 16:40:05.952 {} <> [55268] Error: failed to load texture art/Textures/TunnelTextures/Soil/Soil_wall_nm.dds: out of texture memory budget (0 / 3)!
ERRR 2018-08-23 16:40:06.297 {} <> [55276] Out of texture memory, trying to lower texture quality by 2
Thanks for fixing this issue!