It was supposed to be a chaotic situation. It was a bombing and a massacre that the player is in the middle of. The smoke, ash, and ember added a lot to the atmosphere. It's also pretty easy to tell who the enemies are in KZ since they have glowing red eyes.
while I agree that graphical effects add to the atmosphere, there's a point at which the artist and designers need to understand that less but better might be the more appropriate approach. You can create chaos through a vareiety of different ways, you shouldn't be hampering the gameplay for graphics.
In the screen I posted you can you easily and readily tell the difference between the person shooting at you, your priority targets, and how best to neutralize them? If not, then what did you think the developer added to ensure that players dont become overly fustrated? These cinematic effects are a key component in the rise of poor game design like handholding and qte's because they create visual garbage that interferes with the gameplay. The more fustrating the game (key is fustration and not difficulty), the less immersive and atmospheric the game. The same goes for things like cheap or shody AI.
the reality is that these effects, like dof, bloom, flares, glares, etc, they take you out of the immersive gaming enviroment by creating a needless game design issues. While it looks incredible, you're not going to be stopping in the middle of a firefight to notice how nice everything looks, you're going to do that after, and there's really a great opportunity for the designers to reward the player with a beautiful vista.
Halo 4 has many good examples of how adding cinematic visual effects that do nothing but hamper the end experience. They make the jackals sniping you invisible from the suns lensflare, they make the head less visible and harder to hit, and they take away from the beautiful level and enemy designs of the others who worked hard on the game. Or how about the dirty goggles in BF3, who keeps their gear in such bad condition, how does the inability to see what you're doing in a game make it more immersive or better?
These effects are the new bloom of the console era, and they're creating more and more gaming issues then ever.