Seconding this.
I believe that current system fits DayZ (which is close encounters-focused due to it's "Friendly?" nature and need of social interactions between players), but it needs fine tuning to fit Arma.
Reforger's implementation has several problems:

1. It promotes close firefights no further than 100 meters (tbh, I never had even a midrange firefight at this moment), and this is wrong on so many levels as Arma was always about combined arms and actions on a squad/platoon level.
2. Since soldiers become just a few pixels beyond 200 meters, players can't see the result of their shootings, even that Arma 3 jittery hit animation was much better. It's a game, almost no one enjoys bullet-raining trees and bushes for an hour as it happens in real life. This detrimens gunplay a lot.
3. This basically makes any kind of rifle optics is necessary to hit something beyond 200 meters, so all public servers will be just PSO-1/ACOG fest. Humans are able to recognize and hit standing target with naked eye up to 400 meters as it stated, for example, in AK-74's shooting instruction books.

Can confirm - worked for me too. Thank you for posting the solution.

In T158403#2192726, @dedmen wrote:

"Since the DLC came out" or "Since the last Arma update 2.04 came out"
when exactly did that start? So far it doesn't seem to be caused by Arma.

I have the same problem. I had it before 19th May when i was on Steam Beta branch, but since i opted out of it things became good again. Until today.
Error started appearing today again, i guess this Steam Beta update moved into their stable Steam branch.