I do this for a living and my company's CEO erased about 3 months of work today. I unfairly placed my anger on you. I apologize.

The reason the rendering distance of the grass is actually in play here, despite not being obvious, is due to the fact that UE4 does not place a high priority on rendering small details like this. Specifically, UE has ALWAYS been behind on grass. I know it sounds crazy, but the engine itself is more focused on loading large numbers of medium and large sized objects and large maps. It's probably very taxing on the GPU to load just sonic and those deer(?) At such high textures. The developers of the engine are known for using unorthodox and quirky methods of rendering grass specifically in order to increase the amount of resources available. Consequently, most of the time the render distance of the grass is bottleneck-ed AFTER these methods are done, and typically render after other things. In most cases, it's not too noticeable because grass is so small.

Another factor is that in the past, the engine hasn't actually rendered the grass until the user is fairly close. There's no point in loading such a texture that the user can't possibly see that far away.

So yes, and no, it is and is not rendering distance.

To add to that, and just as a disclaimer, most of these demos are maybe 60-70% accurate representation of the finished product. Whoever made this could have used improper techniques/tools and may not be getting the desired performance, but rather "good enough for the demo, lol". I know UE4 is a cluster fuck of stuff to wrap your head around from my experience.

TL;DR you'd be right any other time, but UE doesn't really give a shit about grass, or hasn't previously, and doesn't make it super easy to render efficiently.