Let me preface this by saying, I play Minecraft on a slightly low render distance- 8 instead of the default 12. In 1.18, clouds were moved up to y=192, and it made them slightly foggier due to the higher distance from them. In 1.18.1, the cylindrical distance function was added to fog, which seems to have worsened the issue with clouds for me, as now the fog fades all at once going higher, making it even more noticeable.

I have a proposed fix for this, which I hope is reasonable to implement. 1.18.2 adds the shape value to the fog shader, allowing for different fog shapes. My idea is to add a new shape (circle?) that disregards the y-value entirely, in order for clouds to look right at all heights and render distances.

Attached screenshots were taken at y=64 on render distances 12 and 8 respectively.

Edit to mention that this also happens to a lesser extent to the sky itself, although this could be intentional due to how the sky interacts with water fog. Could just set the fog to spherical when underwater like in the current 1.18.2 snapshots.