That is a known bug with GPU shadows that is somewhat related to the black letterbox. It may also be related to anti-aliasing (if you have that enabled manualy in your eq2.ini or elsewhere, disable it and see if it goes away).
The bug is known to Imago-Quem (the Dev working on the shadows) but to my knowledge he has not yet been able to roll out a fix. If turning AA (anti-aliasing) off and removing the letterbox doesn't fix it, the only thing you can do is go back to CPU shadows.
The bug is completely unrelated to your choice of UI -- it will occur in any of them (including the default).
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