When shooting/throwing grenades at nearby targets, the graphical representation of the bullet or grenade is scaled proportional to the distance of the shot. This doesn't affect game play beyond making it difficult to see grenades thrown at close range and impractical (visually) to mod any kind of short range projectile weapon.
Normal bullets and grenades:
(https://i.imgur.com/lHD55M8.png)
(https://i.imgur.com/Nt0HiOe.png)
Squished bullets and grenades (ignore the spontaneous cleaning):
(https://i.imgur.com/A1tipPt.png)
(https://i.imgur.com/aS44pi6.png)
Test was run on a stock just landed colony. If I had to give an uninformed guess about what was going on I'd hazard that, if there are different Y values in the position IntVec3(s) used to track pawns, tiles, etc., when the Quaternion is pulled for the look rotation for targeting it adds a pitch down for closer targets.
damn, I just checked and you're right, I don't remember it happening in 1.0 so it could be a regression.
Fixed for a future build. Thanks for reporting :)