This isn't a game breaker per say, but it does make game play very "interesting" in trying to avoid or collide with Capships
What happens is when a KEW weapon is fired or when a missile explodes the resulting glow color completely over lays on the texture of the nearest ship, so instead of the textures of the ship, the texture maps are replaced by the color of the explosion or KEW round that passes near the ship, and the effect also makes the said ship "skeletal" up close. This makes two points of game play interesting, the first is avoiding collisions with capships, since the ships become skeletal, it's hard to tell where the ship's hull is for visual ques so you can fly WITHOUT slamming your ship into it.
On a side note, this "bug" makes combat landings "doofy", as skeletal effect of it makes me just go pointing my ship where the deck "should" be and slamming myself down what can only be described as an invisible landing deck, it doesn't break game play.....but it just looks bad.
It may be because I'm running a dinosaur of a machine with a 32-bit Windows XP with a pentium 4 at 3.2 GHz and 3.5 GB of RAM , but since I can run FS2 and some other mods without this problem I'm putting this out there.