Solved after messing around a lot with the help of some friends. The issue was caused by D3DCOMPILER_47_dll gone missing for whatever reason. This can be easily fixed by downloading patch kb4019990.

In T123438#1584070, @BISWizard wrote:

Hello Nife,
we've released update of Arma 3 Tools today. Is the issue still present in the updated Publisher?

In T123438#1576325, @BISWizard wrote:

[...]

As requested here are the two logs generated, bundled together for convenience:

In T123438#1576293, @BISWizard wrote:

Hello Nife,
could you please check system event log for related crash report? The error that caused the crash is not present in any of the logs.

+1 on this. Experiencing everything down to the 5-letter-password working fix and I'd rather have a more secure password back.

+1 - This is a serious problem and an urgent fix would be very appreciated.

+1 for this since it can't be that hard to fix and it would go a long way to making the experience feel more authentic.

I don't even know what to expect from BI anymore, sure a lot of the things in the latest update were pretty neat and I'm sure we're all glad they still work on the game so hard, but for crying out loud, this is a pretty irritating issue that's ALREADY SOLVED.

Now we have to wait another month or so for a new chance at they remembering this is even a thing.

+1. Regardless of whether this causes any actual clipping issues or not, it looks absolutely jarring and ruins the atmosphere of the game a bit just by virtue of looking so goddamn unnatural.

I'm sure there was a reason this was implemented in the first place but it ain't working: PLEASE do something about this issue.

Please actually fix this issue.