Hi all,
I am using an HDRI for the external lighting but in a separate test I turned off all but the pool spots so I can confirm it is definitely them causing the sharp shadows.
With regards to the size, this still occurs if I make the lights much larger. It seems to happen irrespective of the size. My scene set up is to scale and the same default 'starting scene' that I use in every project. however, I have never seen this before.
As I mentioned before, even using an ies light doesn't work. My only suspicion is that the lights are excessively bright. Although, regardless of how bright they are, I can't imagine I should be seeing such sharp shadows...