The bug

When you have a large model that is bigger than a single block space (for example using a block/item display entity with large scale), the model is only lit up in its entirety based on the light level at the origin of the model; it doesn't get lit partially per block.

Steps to reproduce

Block display entity

1. Create a superflat world

2. /time set midnight
   /execute align xyz summon minecraft:block_display run data merge entity @s {block_state:{Name:"stone"},transformation:{scale:[15.0,15.0,15.0]}}
   /setblock ~ ~ ~ light

3. Observe how the block display is fully lit

4. /setblock ~ ~ ~ air
   /setblock ~15 ~ ~15 light

5. Observe how the block display is entirely dark

Banner (other 2 tall blocks are actually 2 separate blocks)

1. /fill ~-14 ~10 ~-14 ~14 ~10 ~14 stone
   /setblock ~ ~ ~ white_banner
   /setblock ~ ~1 ~ light[level=1]

2. Observe how the model doesn't get brighter where you placed the light block (note, your player model does light up slightly as it takes the highest light level of all blocks the entity is in)

3. /setblock ~ ~ ~ light[level=2]

4. Observe how the whole model gets brighter, not just the corner you placed a light block in.

Notice

I realize this comes off as a bit of a change request, but fixing this will allow map makers to model entire areas in detail without having to create hundreds of model files to replace individual blocks.