Light emitted from torches is slightly blocky in the northwest and southeast direction. This is very minor, being hard to notice in gameplay and having no real impact, but this problem does not appear when light fades out to the northeast or southwest, so I assume it is not intentional.
[media]Same image with increased contrast:
[media]
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Does MC-138211 describe your issue?

They might be related, but I was specifically talking about the jagged edge to the lighting. Look at the top-left / bottom-right edges in the high contrast image, compared to the other two edges.

Can confirm in 1.17.1, but this could be a problem with the image algorithm instead of a problem with the smooth lighting itself.

Probably not since you can see a hint of subtle blocky lighting in the original image described going in the North-West, and South-East directions.

Relates to MC-197497, if not duplicate (it's not extreme here because of the skylight access)