I managed to get a bit more from TGC about the restricted stencil shadows for characters in FPSC X10:
Quote: "The problem was that longer casting shadows would interfere with vertical geometry and cause unwanted visual artefacts so the shadow has been set to cast mainly downwards with some internal clipping. As such the engine does not offer long shadow support."
If they are not intending to fix stencil shadow projection on vertical geometry I think they should have properly projected shadows on the floor and just make it so there are no shadows cast on vertical geometry. At least that way we would still get the same quality shown in the tech demo.