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If you're able to see the light, the truth emerges from the shadows

Light is inside cylinder

Your close. IMO, with the picture stating whats "true" then I'd have to assume there's actually 2 lights.
One Orange light being projected from the 4 O'clock position onto the cylinder resulting in a square shape shadow.
The other, is a Blue light being projected from the 8 O'clock position creating the circle shadow.
If there is another explanation for this puzzle I'd love to hear from more people and chime in on what they came up with :)