At a basic level, the implementation supports two levels of LoD:
FAR from /sim/rendering/static-lod/ai-range-bare to /sim/rendering/static-lod/ai-range-detailed.
NEAR from /sim/rendering/static-lod/ai-range-detailed to 0.
(First of many digressions: If /sim/rendering/static-lod/ai-range-mode-pixel=true then instead of measuring LOD distance in meters, the size of the object in pixels is used, so the ranges are different)
The models that are loaded for FAR and NEAR depend on a combination of the availability of a model in /AI/AIrcraft/ and FG_AIRCRAFT directories.
If /sim/rendering/static-lod/ai-range-detailed=false then an AI aircraft will be used in preference for both NEAR and FAR.
If /sim/rendering/static-lod/ai-range-detailed=true then an AI aircraft will be used for FAR, and an FG_AIRCRAFT for NEAR.
Obviously if only an AI or a FG_AIRCRAFT model are available, that will be used for the entire NEAR+FAR range.