A given light can cast either depth-mapped shadows or raytraced shadows, but not both simultaneously. You can mix shadow types with multiple lights, of course. If you're using raytraced shadows, you'll also need to enable raytracing from your render options panel. The Atmosphere Strength dial is for use with volumetric lighting effects. I haven't used P5's atmosphere feature enough to know if it has any noteworthy effect on shadows, but in reality something like smoke, mist, or haze would diffuse light and soften shadows. nerd has a tutorial on P5's atmosphere feature, if you're interested.