You forgot a detail that's been told over and over already. Implementing Ambient occlusion has been stated by SE as a futureproof option. It's not supposed to be used (while I find it's inclusion to be rather silly, I would have left it out, as it causes confusion and I don't know a single person taking advantage of it). They put it in for the simple fact that it took basically no resources to include it.
Unlike dynamic shading/lighting, it's such a simple (in implementation) effect that you can force it on almost every game from your video card control panel if your VC is powerful enough. Even if it's not implemented in the game.
The 100 on screen characters don't cast shadow on each other, by the way. Just on themselves and the ground. Luckily their shadow is small, and the problem is almost unnoticeable.
Adding environmental shadows would involve shadows to be cast on every single character happening to walk in the area, which is a LOT different.



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