For enemies, items, and weapons (if the correct quest script setting is enabled) the shadow is drawn at the object's X and Y exactly as it's set in the MISC: Shadow (Small) sprite.
For Link, the shadow sprite is drawn at an offset of Y+8.
This means that shadows will always look wrong for either Link or enemies/items/weapons since they can't be configured for both. For example, if configured for Link, enemies will seem to land in front of their shadows, which looks strange.
Additionally - and this may not be a bug - shadow sprites do not animate on any object.
I have not tested large shadows at all, since I really don't know how they work - they may have a similar issue.
This image shows the object's X/Y coord and their sprite so you can see the difference in how they're drawn:
Edited by Ebola Zaire, 16 November 2020 - 10:23 AM.