Both of you do not have enough video RAM.
Mods - can we put a hard requirement in the original post that 8GB vRAM are minimum and bellow that textures will be blurry.
It is stupid to read page after page of complaints about basic hardware limitation, not matching the requirements for UE5 engine (8GB vRAM being minimum, so all nGridia 4GBs wont work well).
This is not the game's problem, but where the entire gaming world is headed, I don't like it, people without the hardware may not like it, but this is life - memory requirements double every 5 years. In old games when you had less video memory you got ugly error. Now you get the game, but its blurry so you go to complain to the dev... No happy middle.