That was my initial thought too, but OP states it only occurs with baked lighting. So I think it specifically may be due to the lightmaps/shadowmaps mipping causing the dark parts to filter into the light parts.
I would use LODs and switch the knit to a non geometric version at that distance. At that scale it is impossible to discern the knit mesh, so the detail is just wasted anyway. Just swap it for a solid pouf at that point.
Maybe consider Parallax Occlusion Mapping for your mesh instead of geometry.
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