Both r.LPV.DirectionalOcclusionDefaultDiffuse and r.LPV.DirectionalOcclusionDefaultSpecular are set to .75 by default. Not sure why, or if this was a recent change since there’s been a bit of poking around the lpv code the past couple of months.
If you set r.LPV.DirectionalOcclusionDefaultDiffuse to 1, that seems to fix the square bounding issue. You can set r.LPV.DirectionalOcclusionDefaultSpecular to 1 as well but I feel like I never got lpv to affect reflections/specularity ever.
I did more investigation and the issue seems to be visible only when you put r.LightPropagationVolume = 1 in ConsoleVariables file. Regardless of whether you are actually using LPVs in your level or not. So for the time being, we can’t enable LPVs without seeing this square following us.