There are a number of threads about problems allegedly caused by Distant Terrain, and some of them can be resolved by disabling Distant Terain indeed. I myself haven't had (or noticed) any problems with this mod. Does anyone know if the mod itself is buggy, or if the problems are caused by incompatibilities between Distant Terrain and other mods?
I use pure DFU together with DFSetup plus a few mods and quest packs, most of them gameplay-oriented, which I downloaded and installed myself (I'm not interested in 5 GB of graphics mods contained in GOG's DFU package, but I do use, for example, World of Daggerfall, Enhanced Sky and Interesting Terrains). Is it possible that I don't get the Distant Terrain problems simply because I don't use one or two mods contained in GOG's DFU package?
If it's mod conflicts, it might be possible to fix them without throwing a nice mod in the bin.

Back when 0.13.5 dropped I did testing with my modlist in the unity editor to catch any new bugs. Distant Terrain then started spitting out an error message during load.
So, no matter if you notice it or not, there is a bug in Distant Terrain that is floating around in the DFU process while it is running. If it actually has any effect will probably depend on anything from hardware to load order to which mods you use.
At the moment I recommend removing the mod and simply setting the DFU view distance to max.

Edit: And just so I am clear: the error kept happening even when running DFU with no other mods than Distant Terrain.

Clear enough :-) - thanks!