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His DxDiag is similar to mine in that it doesn't display the main GPU, but only detects the integrated one. To be sure of this, open Device Manager and expand Display Adapters. If you don't see another item under Intel HD (like this http://i.imgur.com/vdtuk4a.png), then I guess you don't have a main GPU like Dabbleh said.
does it mean problem will stay like that?If I recall correctly, Legions never got along well with integrated graphics cards. If messing with the editor's view distance doesn't help, it will likely stay that way unless the devs know what's going on.
Just tried increasing Frostbyte to 12 and got those squares. Maybe Legions only likes 8 and 16 sizes.