This effect is set via SetFullscreenEffect(FULLSCREEN_EFFECT_CHARACTER_FRAMING_BLUR, x, y). Using the following command in chat should remove it:
Code:
/script SetFullscreenEffect(FULLSCREEN_EFFECT_NONE)
For a more permanent solution, one could try to replace the UpdateTarget function of the ZO_CharacterFramingBlur scene fragment so it doesn't do anything. That should remove the effect from most menus.