I think (and I expect I'm wrong) that the original 16km fix removed all fog so it would work, which meant that if you had close-up fog in bad weather it wouldn't be there, so you could see ships in weird places.
Whether or not that was the case, there is a fix available on Terrapin's sight, and it may also be on the "Mods List" page here.
If you don't find it, I'll be glad to send you a copy, but it will take time as I have to copy it and bring it to the library to post.
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