Transparency Dithering

The dithering texture used in Shadow Generations

Dithering, specifically transparency dithering is an effect to "emulate" transparency blending without having to actually carry the cost of blending. It is usually used to blend models out or make otherwise opaque models see through for a variety of reasons.

A circle slowly dithering out (recreated in blender) (scaled up by 400%)

All Hedgehog Engine 2 shaders have dithering code implemented (only confirmed for Shadow Generations right now), but more research is required to understand under which circumstances it is used.