Mh. Not sure. Actually I think the difficulty to see planes is an improvement over IL2.

There are numerous accounts that pilots just missed each other despite passing not too far from each other.

I understand the optical issue brought here by OP but IL2 is not a realistic example. With the old IL2 logic one could have as well made the points blinking with a pink arrow painted on top of them accompanied with the tag "Here! Here!"

One can spot planes from a quite a distance (4 km) in Clod if one is attentive and in a good position. Which btw is about in accordance with what Manu wrote on the experiments done by Howell remembering that the plane in Howell's experiment were at least double the size of a fighter. So my guess is visibility limit of 4-5 km for a small plane such as a fighter is fine.

What could be perhaps discussed if at 3 km one could not paint a small trait instead of a dot. I think this is the major concern of OP.

If a better solution of the optical distortion is found without going arcade I will be happy. Old IL2 is imho not the way to go.