Shadow fade for omni lights actually stops the shadow from updating while faded out to improve performance.

drivers/gles3/storage/light_storage.h

@@ -394,6 +394,29 @@ public:
 	virtual void light_instance_set_shadow_transform(RID p_light_instance, const Projection &p_projection, const Transform3D &p_transform, float p_far, float p_split, int p_pass, float p_shadow_texel_size, float p_bias_scale = 1.0, float p_range_begin = 0, const Vector2 &p_uv_scale = Vector2()) override;
 	virtual void light_instance_mark_visible(RID p_light_instance) override;
 
+	virtual bool light_instance_is_shadow_visible_at_position(RID p_light_instance, const Vector3 &p_position) const override {
+		const LightInstance *light_instance = light_instance_owner.get_or_null(p_light_instance);
+		ERR_FAIL_NULL_V(light_instance, false);
+		const Light *light = light_owner.get_or_null(light_instance->light);
+		ERR_FAIL_NULL_V(light, false);
+
+		if (!light->shadow) {
+			return false;
+		}
+
+		if (!light->distance_fade) {
+			return true;
+		}
+
+		real_t distance = p_position.distance_to(light_instance->transform.origin);
+
+		if (distance > light->distance_fade_shadow + light->distance_fade_length) {
+			return false;
+		}
+
+		return true;
+	}
+
 	_FORCE_INLINE_ RID light_instance_get_base_light(RID p_light_instance) {
 		LightInstance *li = light_instance_owner.get_or_null(p_light_instance);
 		return li->light;

servers/rendering/dummy/storage/light_storage.h

@@ -91,6 +91,7 @@ public:
 	void light_instance_set_aabb(RID p_light_instance, const AABB &p_aabb) override {}
 	void light_instance_set_shadow_transform(RID p_light_instance, const Projection &p_projection, const Transform3D &p_transform, float p_far, float p_split, int p_pass, float p_shadow_texel_size, float p_bias_scale = 1.0, float p_range_begin = 0, const Vector2 &p_uv_scale = Vector2()) override {}
 	void light_instance_mark_visible(RID p_light_instance) override {}
+	virtual bool light_instance_is_shadow_visible_at_position(RID p_light_instance, const Vector3 &p_position) const override { return false; }
 
 	/* PROBE API */
 	virtual RID reflection_probe_allocate() override { return RID(); }

servers/rendering/renderer_rd/storage_rd/light_storage.h

@@ -590,6 +590,29 @@ public:
 	virtual void light_instance_set_shadow_transform(RID p_light_instance, const Projection &p_projection, const Transform3D &p_transform, float p_far, float p_split, int p_pass, float p_shadow_texel_size, float p_bias_scale = 1.0, float p_range_begin = 0, const Vector2 &p_uv_scale = Vector2()) override;
 	virtual void light_instance_mark_visible(RID p_light_instance) override;
 
+	virtual bool light_instance_is_shadow_visible_at_position(RID p_light_instance, const Vector3 &p_position) const override {
+		const LightInstance *light_instance = light_instance_owner.get_or_null(p_light_instance);
+		ERR_FAIL_NULL_V(light_instance, false);
+		const Light *light = light_owner.get_or_null(light_instance->light);
+		ERR_FAIL_NULL_V(light, false);
+
+		if (!light->shadow) {
+			return false;
+		}
+
+		if (!light->distance_fade) {
+			return true;
+		}
+
+		real_t distance = p_position.distance_to(light_instance->transform.origin);
+
+		if (distance > light->distance_fade_shadow + light->distance_fade_length) {
+			return false;
+		}
+
+		return true;
+	}
+
 	_FORCE_INLINE_ RID light_instance_get_base_light(RID p_light_instance) {
 		LightInstance *li = light_instance_owner.get_or_null(p_light_instance);
 		return li->light;

servers/rendering/renderer_scene_cull.cpp

@@ -3028,6 +3028,7 @@ void RendererSceneCull::_render_scene(const RendererSceneRender::CameraData *p_c
 	light_culler->prepare_camera(p_camera_data->main_transform, p_camera_data->main_projection);
 
 	Scenario *scenario = scenario_owner.get_or_null(p_scenario);
+	Vector3 camera_position = p_camera_data->main_transform.origin;
 
 	ERR_FAIL_COND(p_render_buffers.is_null());
 
@@ -3037,7 +3038,7 @@ void RendererSceneCull::_render_scene(const RendererSceneRender::CameraData *p_c
 
 	if (p_reflection_probe.is_null()) {
 		//no rendering code here, this is only to set up what needs to be done, request regions, etc.
-		scene_render->sdfgi_update(p_render_buffers, p_environment, p_camera_data->main_transform.origin); //update conditions for SDFGI (whether its used or not)
+		scene_render->sdfgi_update(p_render_buffers, p_environment, camera_position); //update conditions for SDFGI (whether its used or not)
 	}
 
 	RENDER_TIMESTAMP("Update Visibility Dependencies");
@@ -3050,7 +3051,7 @@ void RendererSceneCull::_render_scene(const RendererSceneRender::CameraData *p_c
 		VisibilityCullData visibility_cull_data;
 		visibility_cull_data.scenario = scenario;
 		visibility_cull_data.viewport_mask = scenario->viewport_visibility_masks[p_viewport];
-		visibility_cull_data.camera_position = p_camera_data->main_transform.origin;
+		visibility_cull_data.camera_position = camera_position;
 
 		for (int i = scenario->instance_visibility.get_bin_count() - 1; i > 0; i--) { // We skip bin 0
 			visibility_cull_data.cull_offset = scenario->instance_visibility.get_bin_start(i);
@@ -3219,16 +3220,20 @@ void RendererSceneCull::_render_scene(const RendererSceneRender::CameraData *p_c
 			}
 		}
 
-		// Positional Shadowss
+		// Positional Shadows
 		for (uint32_t i = 0; i < (uint32_t)scene_cull_result.lights.size(); i++) {
 			Instance *ins = scene_cull_result.lights[i];
 
-			if (!p_shadow_atlas.is_valid() || !RSG::light_storage->light_has_shadow(ins->base)) {
+			if (!p_shadow_atlas.is_valid()) {
 				continue;
 			}
 
 			InstanceLightData *light = static_cast<InstanceLightData *>(ins->base_data);
 
+			if (!RSG::light_storage->light_instance_is_shadow_visible_at_position(light->instance, camera_position)) {
+				continue;
+			}
+
 			float coverage = 0.f;
 
 			{ //compute coverage

servers/rendering/storage/light_storage.h

@@ -98,6 +98,7 @@ public:
 	virtual bool light_instances_can_render_shadow_cube() const {
 		return true;
 	}
+	virtual bool light_instance_is_shadow_visible_at_position(RID p_light, const Vector3 &p_position) const = 0;
 
 	/* PROBE API */