Seems to only affect some avatars. I'm not sure what causes it. Tried adjusting skinned mesh renderer bounding boxes but no change. Affected avatars don't have any far-away or especially large parts.
Here is a public avatar that is affected:
avtr_efc7e282-5900-4909-8440-ae27c721757e
This particular avatar has a long tail sticking out, but other of my (private) avatars show the same symptoms without that so I don't think that's related, and it had no issues in previous game versions.
This started happening after 1441 which "Improved scaling for the main menu avatar preview, especially for Impostors."