@xcube That's because Volumetric lighting depends on the depth buffer, you can't write soft edges to the depth buffer, a pixel is either written at its depth or not written - fading doesn't really make sense physically.

However!! I did manage to write a custom camera replacement shader that allows just that - writing soft edge to the depth buffer, its actually on my github:
https://github.com/traggett/UnitySpriteShaders/blob/master/SpriteShaders/SpriteDepthNormalsTexture.shader
Using that you can generate a depth+normals texture for a camera that allows you to use effects like Depth of Field or Volumetric Lighting without having to write to depth when rendering sprites (the sprites get written to the depth texture afterwards, with soft edged alpha).

Anyways! I'm away for a bit but though I'd leave peops with a christmas present - I've added Specular maps to the shaders :sun:
It was a hell of a lot more work than I'd imagined - I fell down the rabbit hole somewhat pulling apart how Unity's new shaders do their physics based specular effects but managed to get it workign with the sprite shaders.
Specular effects are optional (so wont effect shaders performance unless you enable them) and are based on the Metallic workflow for shiny materials using a Metallic Gloss Map as explained by the first chart here:
https://docs.unity3d.com/Manual/StandardShaderMaterialCharts.html