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Background has horrible aliasing while foreground doesn't?

Sorry if I posted this in the wrong place (or twice, first try seemed to have disappeared and I can’t find it), D4 recently released a demo and I’m having a bit of a problem with the game:

I’ve tried searching for ~3 hours now and I can’t figure out what the name of this effect would be. The game runs on Unreal Engine 3 and uses the generic files, but I have no idea what to change in them. It looks almost like blurring in the picture, but in others areas there is definitely bad aliasing. Turning of radial blur, depth of field, and a multitude of other effects didn’t seem to fix it.

Looks like it’s due to their graphical style

I’m sure that the blurring is, but I realized the problem seems to be with the game flickering, so you can’t really see it in my picture. The further away an object is, it starts to blur and flicker. You can see the effect in this video at 12:13 + Is this a known Unreal Engine effect that can be turned off?

[video]https://youtu.be/00kfE_ZukaU?t=733[/video]

I don’t see that in the video, in the screenshot it could be an issue with a post process effect they’re using, or it could be a result of one technique to get the cel-shaded look by duplicating the mesh and inverting it and pushing it out, and then using a black material to the make it look like it’s outlining the mesh.
In any case, it’s not due to anti-aliasing, AA doesn’t work that way.

Alright, thanks for taking a look. I guess I can’t do anything about it.