'r.StaticMeshLODDistanceScale' doesn't effect 'show LODColoration'. It does effect the actual performance of the LOD in the level but the LOD Coloration doesn't reflect the change.
It seems r.StaticMeshLODDistanceScale stops working since 4.16, it no longer affects the LOD selection in our project.
Results: The LOD Coloration will be displayed the same regardless of what the 'r.StaticMeshLODDistanceScale' is set too
Expected: For the LOD Coloration to reflect the actual changes that 'r.StaticMeshLODDistanceScale' is making to the LOD Distance
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-46304 in the post.