I believe this is expected behaviour. Its there to simulate a far away player being slightly hidden by grass.

Trust me - it's not right! I should have included a picture to show you. If you shoot at the area where the body should be, nothing happens. It just hits the earth. I can see grass and they're not hidden by it. It's obvious in-game that it's some sort of visual glitch.

Weird, if you could get a picture I think it would really help.

I also noticed when you try and drag a wounded player they will sink into the ground too. Yesterday I actually lost someone in the earth...

@Scott_Ripley

That's a 3rd party script and you should report it to the script-maker.

Ah okay, fair enough.

Simulates clutter not drawn at range, 'fix' is a new feature: http://feedback.arma3.com/view.php?id=4598