I am trying to experiment with the "Atlas" look. It's a hillshade that is generated from a DEM tile that I created by clipping the "terrain" payer. It is shown as a "birdseye" image. The terrain is on an angle getting smaller towards the horizon. It looks fine in the 3D scene. when it is placed in the layout, it creates a break in the resolution of the hillshade. At some point, towards the horizon, the hillshade becomes blurrier by a significant degree. This happens with all types of hillshades I tried, but it doesn't seem to be happening with the elevation relief image (applied to the same base tile.
I have tried to redo the whole process in the different file, and I ended up with the same result. I tried to change the projection of the dem (as advised in some posts) and I tried changing the rendering engine. I don't think it's any of these things... It's like at some distance the Arc decides it's too far to matter anymore and it must downgrade the resolution. If I zoom in within the layout it will change where the line is, but the break like is still there... Please help me figure it out. I am loosing my mind.