Assuming that these images are real, can anyone really believe that a problem like that is due to performance? That is, we are talking about the low polygonal load that is visible to the naked eye, the tentacles have edges on all sides. It is clear that it is a lod problem or a bug. I don't like Fortnite, but maybe I'll check it out on PS5/XSX out of curiosity.
But I highly doubt that this is an intentional downgrade. It reminds me a lot of the PS4/One stage. Xbox fans took advantage of any bugs, anisotropic filtering, textures, or any anomalies to justify a performance difference.