So I just finished my witch/wizard hat mesh and decided to put it on a dummy to see how it looks. Turns out the shadows start acting weird:
Removing the humanoids reveal that they cause this behaviour:
This happens regardless of whether the mesh has a TextureID or not. I think it has something to do with the unique shadows models with a humanoid cast. Here’s the repro place (meshes and texture might still be pending):
Well, it’s character shadows. If it’s part of the outfit, you want it inside the character - the hat comes part of the character’s shadow. As of so, the fix makes the system as intended - but certainly, the bug with shadows going odd for close objects still remains, nonetheless.