'Model Quality' option limited to 'Medium'?
Lowest
Low
Medium
High
Highest
It might be checking your system specs and determines that you can’t use the higher settings. I know it does that with one of the other settings.
Edit: In fact it shows that other setting in your screenshot! The High-Res Character Texture is also greyed out.
I see? I’m pretty confident I’m able to have all the other settings as high as possible. Perhaps not though. I’ve never noticed that option you pointed out was grey’d out! That’s kinda sucky, means I’m stuck with most people around me wearing butt-ugly armour? 
Thanks for your reply though, clears this up! <3
Oh actually I think the greyed out option is for people on 32bit systems or something like that. The higher values/high-res option can cause crashes for some system with lower amounts of memory.
Hmmm alrighty then.