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Check out this video comparing visual quality and performance impact differences for each of the settings.
https://www.youtube.com/watch?v=NOPUpKU8i9s
Looking at your settings LOD 400 looks like not optimal. It will also likely overflow 12GB Vram and hence suddenly cause severe performance break down.
In my opinion this is not really worth it in VR. This is nice when you play panecake in 4k resolution. But with LOD 400 in VR, you won't notice much of a difference compaired to say 150 but it will significantly affect the performance.
I would rather favor supersampling beyond native resolution of the headset over the Terrain LOD. This costs performance, but it makes everything less blurry, more clear and sharp. Makes tiny text on the instruments actually readable and also distant terrain more defined.
My recomendation is consider trying this:
Frist set Terrain LOD to no more than 150. I would start with 100 and increase a little bit in the end if you end up with some overhead.
Use DLSS Performance mode. Not quality, but performance.
It will render at half of the native resolution and give you significant performance boost. However it will also make everything messy and blurry.
Now you can counter this by supersampling beyond native resolution. You can do it with OpenXR toolkit, by overriding the final resolution. With DLSS performance try 170% and if it goes well you can try increasing to up to 200% of native resolution. Oculus 3 native is 2064×2208p. So override it to 3506x3753 which would be 170% native. You should notice much better image quality and perhaps also better performance.
What happens here is that your GPU in fact is rendering at half of that resolution, but DLSS then upscales it to 170% native using AI voodoo actually producing very good results. This upscaled high res image then is sent to the image buffer of the headset, where it is downscaled to native again by the headsets firmware. However this still results in much better quality compared to rendering directly in native.
LOD affects the amount of detail, not its quality. I can of course set it to 150 or lower, but when I fly I like to watch the scenery. In MSFS 2020, these settings affected render distance, not quantity. I have almost everything there to the max. In MSFS 2020, DX12 was killing the game for me - stuttering. On DX11 everything was fine.
I play VR to with quest 2 and virtual desktop and have 100/120 fps in game but better graphic card (rtx4080s).
If u have some stutter in game u need to have low bitrates in vd.
I try many times and the better for me was 60 Mb in streaming settings (with my 2080s 70fps medium/high settings in game) .
Try this and check ur fps in game ;)
Good luck and good fly :)