They definitely turned settings down for the comparison, GTAIV actually had some pretty impressive shadows, at least for it's time - Like if you put the headlights on full beam and drove around, you'd see things like cars and lamposts occluding the light.
Alex, I agree with what you say about visual identity - It's one thing I've always disliked about a lot of the visual mods, as well as RTX on some other games: Every car look like it's been freshly detailed and polished to an almost mirror finish, that maybe fine for i.e. a racing game, but makes no sense for a clapped out rusty jalopy in GTA