It is supposed to improve render performance on low-end computers, as well as serve as a counter-griefing mechanism against what we call "LoD bombs".(*)
There are 2 ways to resolve that:
- On an individual basis: Right-click a "jellybeaned" avatar and select Render Fully from the menu that pops up.
- Permanently: Adjust the "Maximum Avatar Complexity" throttle.
It's usually found in your viewer's Preferences: Graphics settings. The default setting that LL have chosen is 60,000. While that will render most "system" avatars perfectly fine, it is way too low for the more complex "mesh" avatars.
Which setting works best for you depends on what sort of avatars are around you. Don't be scared to experiment with the throttle setting, until you feel you are seeing enough avatar details. I have found settings between 150,000 and 200,000 to work fine for me.
It is not recommended to disable the feature entirely by setting the throttle to "unlimited". Especially in places that get griefed a lot, an "unlimited" setting will leave you vulnerable to Avatar-LoD related griefing (i.e. "wearable LoD bombs").
Those who would like to discuss that, please start a new discussion in a separate thread. This post here is really just meant to help people see other avatars properly and enjoy their SL experience.