Theoretically, your watch crew should report every type of contact in visual range irrespectively of difficulty settings. However if you use too high TC, you might be woken up from 'hyper-sleep' late, especially when in low visibility. On the other hand, over 256x compression aircraft don't usually get materialized by game engine because of their high speed. A good choice would be not to exceed 256x TC so as not to miss any possible contact.
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