I recently got this problem! The terrain and tree billboards are not affected by fog and blur!! If I change the shader of the billboard to anything else than its default billboard shader, it just completly dissappears!! Whats up with all these glitches? I’m using unity 5.1, as you can see my fog is set to density 1 and the terrain and tree billboards are still not affected from it??
Put GlobalFog effect on your camera, it can be found in some of Standart Assets. Never use fog from Ligtning/Scene