Yeah, this definitely needs to be pushed anew; Maybe with a reframing from "bug report", to "design re-evaluation request", or even "-proposition", if there is somebody among us with the know-how, and ability to formulate a comprehensive suggestion in the proper vernacular and format.
It is not just the Z axis rotation that is the problem, but the two others as well; You'll notice that if you look up/down/left/right, the sprites turn then, too, and it looks not a whole less strange than the roll, so the question that needs to be posed is: "Should these effects be summarily screen-aligned, really?".
Normally, I would set up a sprite object so that it tracks the camera position, and always strives to face it, and on implementation actively choose which axes to match rotation around, and their local coordinate system, so that they stay put in relevant ways in world space, all depending on what sort of object it is (e.g. a glow effect around a beam of light should roll around the spine of the beam, trying to face the camera, but not break free from it with yaw and pitch rotation); But what the ones in Elite: Dangerous does, is that they only track the camera rotation, 1:1 -- not the position, so they are indeed always parallel with the screen, which looks more and more strange the farther out toward the periphery they get; You can really tell that all those steam vent plumes around you is an array of cardboard cutouts, all facing the exact same way on the compass... And that straying anamorphic lens flare? -Judging by the direction it moves when looking up/down, I'd have to presume its billboard, relative to its centre of rotation, is a fair ways behind the star -- this wouldn't have been a problem if it lined up with your position - it would always be on the extension of the line between you and the star... Even the markers on the galaxy map face over your shoulder, as you traverse away sideways, and then over the shoulder of the tenth person next to you...
A mass ejection from a star should stay aligned with the star it belongs to, and not roll around together with your looking around (...or flying around - it's not like the problem does not exist outside of VR); I find it gobsmacking that this needs to pointed out.
One complication I could envision, is if the effect texturing is not applied only with the sprite object UVs, but directly by the screen-space shader -- that could leave you with a projection problem to solve...
It's not like the engine couldn't do it, as indicated by your mentioned cockpit smoke example; Heck... take e.g. the bit in the new video the other day, where the the Thargoids get a splash of water in their faces... That 2D effect is not aligned with the screen, but with the object (possibly being part of it, rather than a separate sprite).
It's always hard to align things, when dealing with 2D surfaces in 3D space, so that the 2D doesn't stand out... Fly anywhere near close to the Proteus Wave site anomaly (depends a bit on the lighting conditions - the bloom and refraction effects hide a lot), and you can see the mesh "shells" of the "pool of light" effect separate them by their parallax. :7
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