I think, for game balance and immersion, grass should always be rendered, no matter the distance.
The reason for this is simply because it's ridiculous easy to spot enemy's on hills far away.
Now bear with me, I'm going to mention CoD.
Anyhow, CoD4 had this same issue at release. Later in a patch though they fixed so it was always 100% render on grass. This way, you could actually hide in the tall grass far way, and ghillie suits was actually useful.
However, long distance grass should be of lesser quality, since it's performance heavy, as long as it's possible to hide in it.