The Snow Flare effect is a GPU Sprite Particle System that is a smaller, simplified version of the Blizzard particle system, used specifically in areas where light needs to interact with the snow and mist. You can see this effect around the statue outside the cave.
The key difference is that in the Blizzard effect, the mist particles were unlit. This means that they could not absorb the color of any lighting in the level and instead used the Emissive channel for color. In the case of the Snow Flare effect however, the mist particles use Lit Translucency in their Material, meaning they can pick up the color of lights. The reason for the separation is that Lit Translucency has an additional instruction cost in the shader, meaning that if all the snow mist particles used it, the scene would be doing a lot of processing just for the occasional color change, thus causing an inefficiency and quite possibly a performance hit.
Instead, this Snow Flare particle system is used as a localized version of the Blizzard effect, and is only placed where the mist particles need to respond to lighting. This is far more efficient than having all the mist particles react to lighting at all times.