"Generate mesh distance fields" creates awful shadows everywhere?

my scene consists bsically of a movable skylight and a movable direct light.

this is with mesh distance fields turned off:

and this is mesh distance fields turned on:

what gives?

Looks like distance field ambient occlusion. You should be able to disable it on a per mesh basis, or globally. I think the cvar is r.DistanceFieldAO 0

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That’s it!

Is there a way to disable it on project settings or something so when I open the project it’s already disabled?

Usually you would set the cvar in the project ini file to make it permanent.

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