Sorry for the double post. I managed to fix it by using a cel texture that was 50/50 rather than 5/95 or 10/90.
I’m pretty much satisfied with the shader right now. But using textures that have more than 2 bands doesn’t seem to work that well, leaving very thin cels regardless of how thick the cels are in the texture. This limits the flexibility of the shader which makes me want to try and fix the World Normal version since it applies textures with multiple bands much better. I still have problems getting it to read the light properly. It still casts weird shadows like shown here:
No matter how many times I try to rebuild the lighting it stays the same. It looks like it’s a problem with the World Normal itself and not the shader since applying it without any bands shows that the shadows are cast incorrectly. Like shown in one of my previous post with this picture:
