I'd rather shade the entire tile underneath.
Here are reasons as to why:
1. The shape of the shadow is constant independent of the unit shape.
2. There is no extra logic needed to figure out slopes or shadow orientation.
3. The sprite darkening methods are already implemented all we do is call them when an unit is "shadowing" a tile and or a unit immediately underneath.
4. Because the game is tile /grid based and nobody will find it strange. Would be more strange if only half a tile is being shadowed then you have to use loftemps to calculate which part of the unit is being shaded etc.
6. It fits with the rest of the game as map tiles over each other shade areas underneath.
7. Is simple.
8. Completely unrelated but I also like Minecraft and I prefer the shadow square
Is just cooler. Fits with the retro game look.
I care more about the limited vision to units underneath for example your flying guy above will make the sniper below see less. Now that's pretty cool!
Gotta say tho. The arrow shadows can easily be done using sprite image and some dissolve type oldschool transparency shadow. Or more like checkered holes in the black shadow area.
The hard proper way would be to have a shadow sprite placed directly underneath the unit sprite but I don't want that