Unreal 4 Lighting Academy....or something like that ;)

I have been summoned.

The limitation is 4 shadow casting stationary lights affecting any point in space. The directional light consumes one everywhere so you effectively get 3 for point / spot lights.

Static lights bake all their lighting and shadowing into the lightmap so they don’t have any limitation on overlap but they also can’t ever integrate properly with shadowing from movable objects and characters.

Stationary lights bake out their shadowing separately for each light. In the deferred renderer we have to get these shadow factors from the BasePass (where lightmap UVs are available) to the deferred lighting passes so we have to pack the 4 shadow factors into the GBuffer. This is why the limit of 4 exists - to keep the GBuffer small as it’s like a performance tax on the entire deferred renderer. The Forward renderer also has a 4 shadow casting overlap limit, but for slightly different reasons.

So regardless of whether you choose ‘Use Area Shadows for Stationary Light’ or not, we still have to store out shadow factors separately for each stationary light to support combining with dynamic shadowing and the 4 overlap limit is the same.

Technically static light sources are drawn into reflection captures so you do get direct specular from static lights if you have reflection captures setup, but yeah it won’t be anywhere near the quality of Stationary lights, which have correct parallax and are shadowed correctly.

It is possible to support more than 4 shadow casting stationary lights affecting a single point, but it would add rendering overhead (either another GBuffer, or re-render the scene’s meshes again to output the next 4 shadowmap channels) so we haven’t tackled it yet.