JCL: The shadow disappearing on close-up is a known problem of the A6 clipping algorithm. At the moment there's a quite complicated (and slow) algorithm which determines whether the shadow is visible or not. We intend to replace it with a simpler and faster algorithm in one of the next updates. #32259 - 08/25/04 03:00 AM

keep in mind: this post was made 2004! again on stencil shadows in 2006:

JCL: This is a known problem. It's _not_ due to the camera inside the volume, but due to the precalculation whether a shadow shall be visible or not (for frame rate reasons). This precalculation sometimes fails and we'll replace it in a future update by a simpler method. At the moment there's no workaround. #76365 - 06/05/06 04:36 PM

and let's not forget the terrain shadow promise:

JCL: Static shadows and dynamic shadows are completely different things. Terrain shadows are of course possible with any hardware, and have nothing to do with the shader templates. They are on our high priority list as you can see in the forecast page. #94937 - 10/24/06 11:56 AM