So I've tried the workaround with the mastery challenge also. And for me the issue seems to be gone as well (everything seems back to normal). After completing the challenge I had the blinking textures, then saved the game. Went back to home on XBOX and entirely closed the game. Reloaded the game opened the save game and it was back. Fast traveled to several regions and cities and so far so good.

@ubi-borealis

When did this start happening (such as after a certain game update, or after completing a specific quest)?
After fighting Cordelia I pledged to Snotinghamecire, this is where if first noticed the issue. It was in the version before the 1.2.1 patch that I noticed it first.
What is the last thing you did before the issue occurred?

Where on the map is it happening?
Basically everywhere, although in Asgard the behavior is different. Grass, mushrooms and bushes are not disappearing but trees are extremely blinking. See included YouTube recording.

@pbmcmlxxi thank you for the suggestion,. unfortunately I'm already past that mission. So I'm trying to continue playing hoping at some mission it disappears again. Although the game is way less fun to play this way.

For me it feels like there is a game mechanism that hides the surroundings around the player for certain fights/missions. And sometimes that probably won't turn off.

If I remember it correctly this issue started to appear for me after I fought Cordelia

I'm also experiencing this issue for a while now. Still happening after the latest update.

Here is a game clip I've created with the previous version of the game.