BaseScalability.ini file in C:\Program Files (x86)\Steam\steamapps\common\Game\Engine\Config defines the settings used in games based on Unreal Engine 4. Basically, what the ingame options (Low/Medium/High/Ultra) for various settings do. This enables games run across PCs with different hardware configurations smoothly. Sandstorm does not have that file. Are they defined somewhere else?
Additionally, other UE4 games like Squad, Mordhau, PUBG etc do not have different settings under Graphics/Video options for Texture Quality, Anisotropic Filtering and Texture Streaming Pool. Instead, the other two are defined under Texture Quality in their respective BaseScalability.ini files. They have also allocated the stream pool sizes generously instead of the presets that UE4's scalability guide mentions. Link below.
The following is more of a theory as I cannot really check this game's BaseScalability file and hence maybe incorrect
So, is it possible that Sandstorm is using some default preset settings provided by UE4? The highest stream pool size the presets use is 1GB and that's what might be starving the GPUs of VRAM and thereby causing stutters and/or fps drops. Further, I think the stream pool size set in BaseScalability.ini or the same tweaked into Engine.ini might be given priority over Texture Streaming Pool selected by the player.
I have tried using BaseScalability file of Mordhau for Sandstorm with changes in stream pool sizes in different texture quality settings that would suit my GPU with 2GB VRAM. I deleted the previous Config folder in %Appdata% as well. Keeping the rest of the settings at their lowest, "Low" texture quality ran smooth enough at 30 fps. "Medium" introduced some fps drops and stutters but was able to keep up as the game progressed. "High" and "very High" suffered from stutters even though it was showing above 30 fps most of the time. But these results do not mean much considering it is a pretty weak GPU. However, it did change the lighting in the game and the muzzle flashes were much more prominent which would mean it was using Mordhau's settings file to check how texture quality was defined.
Hope this helps. In the event that this theory is all wrong, could you specify the location of file where settings are defined?
EDIT: I can run the game smoothly with my GPU, albeit at around 30fps, by tweaking Engine.ini file than the Mordhau's BaseScalability file that I used to test.
Mordhau's BaseScalability File