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.