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Shadow Tainted is a Frackin' Universe Status Effect. It is primarily the consequence of touching Liquid Aether without protection. Certain enemies (primarily found in Elder sub-biomes) can inflict this as well.
When afflicted by Shadow Taint, a large area around the player will become very dark, making travel and mining risky as it will impair your vision, making falls and surprise attacks somewhat common.
If the player were to be emitting any light it would minimally counter this effect, with a light III augment making an area of approximately 5-6 tiles around the player only half visible.
NPCs are unffected by Shadow Taint. They will however have their health reduced in Liquid Aether until their health is reduced to zero, and then they will die.