Does it react to absolute image brightness ? I.e if you dim down the image from monitor controls will it have any effect and/or is it worse in bright scenes ?

I have a similar thing going on in my monitor but only if the brightness of the image is set high enough. It likely comes down to capacitor aging but it isn't something I have tried to investigate yet (in the todo list).

I don't think the monitor itself is to blame here. The monitor always gets 85fps. If the game is not at a solid 85fps, the graphics card sends the same frame multiple times to the monitor. The monitor just displays the voltage levels it receives from the graphics card. So the voltage levels that arrive at the monitor already contain this flicker, as it depends on stuff the monitor "cannot know". As you get a stable image as soon as fps is locked to the refresh rate, I suppose the brightness of the picture is related to current CPU load (i.e. power usage of the processor). Your fix for fallout likely works because the different color depth changed the power usage pattern of the PC.

The most likely culprit is unstable voltage supply on the graphics card. That might be due to bad capacitors on the graphics card, a bad power supply or bad contact of some power connector (ATX connector, graphics card slot and possibly dedicated power connector to the graphics card). Another possiblity is a bad ground connection of the monitor cable. The precise ground level at the PC might depend on CPU load, and the video levels are referred to the ground level at the PC. It is important that the monitor interprets the input voltages with respect to the PC ground, and not just some monitor internal ground. So your issue might also be caused by a bad VGA cable that doesn't provide a sufficiently stable ground connection.

Thanks. Never would've occurred to me that the cable could be the culprit, but that's what it was.