This has been an ongoing problem with shadows and well there has been so far no luck with fixing it via modifying the settings, so I'm here asking CDPR to fix it as i believe its an engine problem
After some playing with CascadeShadowDistanceScale values i'm starting to think they control something like distance after which lower quality shadows take over.
However if the value is too high they seem to be disabled or replaced by lower quality shadows.
For example setting CascadeShadowDistanceScale2=16 seems to disable shadows at far distance, In Kaer Morhen scene, as in your video, the shadows are gone for the trees over the wall on which we see Ciri training. If set to 8, they seem to be replaced by blotchy low quality shadows which are probably represented by CascadeShadowDistanceScale3.
Similarly CascadeShadowDistanceScale0 if increased too much, for example to 8, seem to be replaced on Geralt's face by low quality shadows while farther shadows look good.
For me biggest improvement seems to be by changing CascadeShadowDistanceScale1=3, then medium distance shadows do not get cut of, which is very obvious.
Then I increased CascadeShadowDistanceScale0=2 - this made near shadows more stable, with less rippling edges and minor loss of quality on Geralt's face. It can be increased to 3 for a bigger quality loss on face, but also a bit increased distance for high quality shadows.
CascadeShadowDistanceScale2 and CascadeShadowDistanceScale3 I left at 1.5 - need to play with it further to see if there are any gains of increasing these values.
Example screenshots (look at the shadows on the ship side)
CascadeShadowDistanceScale1=1:
View attachment 16408
CascadeShadowDistanceScale1=3:
View attachment 16407