In the following situation, who has LoS to who?

A
XXXBCDE

Is it really correct to suggest that:
A has LoS to only to D
none of B, C, D, E has LoS to A

From the "Gathered List of Answered Questions":

LOS
A) In the instance where you have a figure blocking the Line of Sight of another
figure, is that Figure targetable, no matter the circumstance?
...
A) For purposes of determining LoS for an attack, ignore figures that are not in
LoS themselves.

Yes, that does seem to be the current rules-as-written. Though it doesn't usually come up, the Descent LOS rules do have weird special cases that can't be easily solved.

If it's any consolation, keep in mind that most figures are going to move pretty much every turn anyway, so even if a situation like that comes up, it probably won't have time to affect very much before things change.

The only thing it would really effect is guard orders... A monster could potentially "snipe" a hero from a position the hero couldn't see. But that being said, I say that if the rules are well known, it's the heroes' own fault for getting into that situation!

This is in the FAQ

Actually, a similar situation is in the FAQ. This is an interesting special case, but like Antistone said, the moments where this will impact the game are rare indeed.