This is nuisance for ArmA 2 and ArmA 3, I'm not realistically expect bis to fix this, but yeah it would be really cool to have smooth game play experience on larger terrains "far sides" in ArmA 3. Feel free to open feedback tracker issue with reference to this video heh.
Ahh, the good old floating point precision problem
In short : object positions are (usually) represented using floating point data types
( google for IEEE-754 on wikipedia, this is my first post on the forum and I am
not allowed to add any links at the moment ).
The thing with floating point data type is that when the numbers are big, they lose precision.
In computer graphics this starts to occur when object position coded in single precision floating point is more than 30 000 units ( usually meters ) from (0,0,0) point.
And it starts to look like the position of the object is "quantified".
Look at the video at 4:05 - the rifle looks like it moves for certain number of
centimeters every frame - its movement is quantified.