Whatever that gun does when it's fired probably applies an effect defined by the circular region. Likely it's a stencil mask to save it running on every pixel and since the circle contains the scene data it's probably some sort of heat shimmer, lensing or reflection effect.
It's probably only happens when antialiasing is enabled simply because MSAA is slower to debug so probably didn't get tested properly in a driver regression. Not too surprising as it's quite an old title. It's probably upside down because whoever wrote it is more familiar with DirectX and forgot OpenGL has a different coordinate system.
If it's AMD only then I'd assume it's an OpenGL driver bug. Developers like ID don't tend to miss things like that - it probably worked with the drivers at launch.