I’m having trouble with this word in its usage here, and understanding the logic behind it. As an adjective, “aufgelöst” is often translated “hysterical”, like if someone is extremely upset, and this meaning is more intuitive to me.
As a verb, I see “auflösen” is also used to mean “dissolve”, “cancel”, “disperse”, and “dissipate”, again, which are more intuitive. I guess it’s just an idiomatic thing that you can use this word in this context too? It’s sort of describing what happens to the Taxi visually as it disappears into the fog?
In English if you said that “the Taxi dissolved into the fog”, it would be a bit poetic but anyone would immediately understand what you meant. The verb auflösen is used in this way in several German figures of speech all vaguely meaning “to vanish” or “to become nothing”.
These possiblities for colorful expression exist in every language and it’s nice to see examples of them, even if they are not good to take as “paradigmatic”. IMO this would be considered a “C1” level usage, i.e. nonstandard but nonetheless unambiguous and appropriate.