
Not the most egregious example; I'd thought I'd took a screenshot when I'd seen it at its worst, but turns out I hadn't. In any event, you can see the light from behind my character's head shining on his lips and a tiny bit on the corner of his eyelids.
It happens because, basically, our character models cast shadows but they don't block light. If you manage to get your camera inside a player model you'll see light shining through clear and unfettered. Getting our character models to block light and cast shadows wouldn't be worth the effort. Ray tracing works for it, but real-time ray tracing is pretty new, taxing, and it can't be done with older video cards.
They've mitigated it a fair bit. I can't stand in strong light and make it look like my character is barfing Light anymore. It's still there but not nearly as strong.