This needs a lot more attention and votes, everything is affected by this. Buildings, characters, foliage, rocks - everything is fully lit by sunlight or other light sources even if it lays in the shadow that is casted by the terrain.

It doesn't matter if one chooses to approach an enemy position along a mountain slope that is facing away from the sun, because you're lit up by the sun anyway and you will be perfectly visible.

The shadow detail setting does not change any of this.

The solution can be quite easy. Determine if the tree/rock position in the area that has terrain projecting shadow on itself and then lower tree/rock brightness by 50 or so %

If the solution would be easy, I am sure they would have come up with one by now, considering how much attention the devs put into improving the lighting over the last weeks.

Actually, what I wrote above is not correct since grass is already affected by terrain shadow. However it does not cast a shadow itself, like all other objects do (even in terrain shadow). This allows for some odd observations, like trees casting shadows although there should not be any light to begin with.

I just added a screenshot. Notice that the sun is far behind the mountain. (editor parameters to reproduce: July 6th, 18:15, Grid 044037, facing east)

I noticed that when you use the AllinArmA mod and load Chernarus, the terrain casts shadows on all entities (characters, foliage, buildings). It seems it has just not been implemented in Stratis yet. It seems to be an easy fix.

This is because the terrain doesn't cast a dynamic shadows off dynamic lights.

Although dynamic lights have been improved somewhat, the lack of dynamic shadows make it impossible to hide in a building at night when a street light shouldn't have rays of light touching the inside of the building because the engine isn't calculating what should and shouldn't be casting a shadow caused by the light.

The sun and moon are the only dynamic light that casts dynamic shadows from objects not including the terrain.

BI already have a system for casting dynamic shadows off lights in place, they use it for the trees and buildings etc. affected by the sun/moon, so I expect all BI have done is disabled a any light that isn't the sun/moon light to cast dynamic shadows. And all BI would need to do to make the shadows work is just change one value (or more depending on how the code is written) from FALSE to TRUE for the lights from vehicles, flashlights, etc.

I also think this would be true for the terrain if they have it coded in.

Although the performance hit would be pretty huge BI should still make it a option in the video setting for the people who want to sacrifice performance for a better more realistic light rendering system. And they could possibly add in the option to fine tune what lights casts dynamic shadows and what don't.

Also it'd be a good way to get better visual fidelity as the years pass by and GPU's get better and better.

Forgive me for any mistakes, I am very tired from E3.

Exactly what Nicolii said. The dynamic shading is already there, present, because you can see it in action with the sun and moon. BI should make it an option, and maybe it works fine. Honestly the only lights that really need it other than sun and moon are flash light attachments and vehicle lights. because those really do impact GAMEPLAY when playing night ops.

The lighthouse rays also need to be blocked by terrain. Ever since the first version, lighthouses just illuminate everything within miles, because light passes right through the terrain.

This should be a priority issue for the release. I've noticed some official screenshots which have been retouched to hide this bug, and some which show it.

This idea is great and IT NOT EAT A LOT OF CPU/GPU - i remember this solution on very old games (about driving trucks on the highways) - for the first i was thinnking it was artefacts, but later i saw that is shadow made by ground from the lights of my truck. I'm talking about games from 2000 - 2002 so please, apply few lines so ground could produce the shadow.