Agreed, which is why they would need to fade in/out, but it wouldn't be hard to adjust the entities alpha blend
There's a variable in the source,
entityelement(e).ai.alphafade
the easiest way would be to start to fade in from 0 to 100 (or it's set max) before showing the object and visa versa to hide it. The alpha fade just needs to be calculated on it's distance.
Something like this (please excuse my coding)
entityelement(e).plrdist=sqrt(abs(tdx#*tdx#)+abs(tdy#*tdy#)+abs(tdz#*tdz#))
if entityelement(e).plrdist>10000.0
tempfade=100-(entityelement(e).plrdist-10000): if tempfade<0 then tempfade=0
entityelement(e).ai.alphafade=tempfade
if entityelement(e).ai.alphafade=0 then hide object(obj)
endif
Should seem pretty smooth.
In fact this could be expanded by giving every entity an appear at distance, so smaller objects fade in later than larger ones, but this would involve a little more coding.