When multiple display entities such as block_display render on the client and they have a larger shadow radius than default, frame rate times can be severely affected.
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This makes it difficult for creators to properly make use of this feature for specific visual effects, as the larger the radius the bigger the impact. Rendering about the same number of entities without shadow applied doesn't affect performance that significantly even if they're scaled to about ten times their size, so i don't think entity shadows (a simple drawn circle) halving client's performance is reasonable.
How to reproduce
Create a void world (optional)
Summon about 10-20 or more entities with the following command (you can also slightly increase the radius value if needed):
/summon minecraft:block_display ~ ~ ~ {shadow_radius:8}Make sure entity shadows are enabled in video settings, also increase the entity distance if needed.
Check the frame rate with ALT + F3.
I found this yesterday myself too and realized while messing with the effect that shadows are applied kind of like a sphere and not just a simple circle. So what I think is happening is it is checking every block within the shadow radius to determine if a shadow should be cast on it and how dark it should make it. If you do it on a hill, you'll notice that it gets darker/lighter in differing heights and distances around the center.