I decided to install Windows, and lo and behold, I can also reproduce on native drivers too. It looks like it's definitely just a game bug. Too bad...
Fixable. It either depend on nvapi, d3d9.supportDFFormats = False dxvk option (fixed in current master and 1.10.x git branches), or maybe it was forced Mip LOD Bias (-1)

Fixable. It either depend on nvapi,
d3d9.supportDFFormats = Falsedxvk option (fixed in current master and 1.10.x git branches), or maybe it was forced Mip LOD Bias (-1)
Can you elaborate? I'm using AMD hardware here so I doubt nvapi stuff would help, but regardless I tested on a GTX 1070 with native nvapi and the bug was still happening. d3d9.supportDFFormats = False doesn't make a difference, master builds are the same, and I'm not sure how to force Mip LOD Bias? I saw something like that for d3d11 in dxvk.conf, but nothing about d3d9.
libstrangle can do via STRANGLE_PICMIP=-1 environment variable or via launcher script with parameter.
proton 7.0-4x1 2022-09
In Grand Theft Auto IV, ingame light sources will flicker at certain camera angles when the graphics option Night Shadows is enabled.
The apitrace also reproduces the issue on wined3d, so I'm not convinced this is strictly a DXVK bug per se, but to my knowledge this doesn't happen on Windows d3d9 drivers.
Software information
Grand Theft Auto IV: The Complete Edition (Steam appid 12210)
System information
Apitrace file(s)