Shadows are present but small (as if the sun is directly above, no shadows from the crowns of the trees) and weak (not very dark, no hue shift). The color scheme is strong in the reds and greens, with very little blue. I can't really tell what time of day or weather is being depicted. Dusk would have longer, darker shadows. Overcast day would have less color, and probably even weaker shadows. Night would have a lot less color and much darker shadows. Direct sunlight at noon would have darker shadows with a definite hue shift. So now I'm thinking either noon with dust clouds/smog dimming and reddening the light, or a deliberately ambiguous twilight meant to unsettle the player with its ambiguity.
My initial impression was that this looks too bright and cheery for a dark fantasy setting, but now I'm thinking this could work, in a daylight/twilight horror sort of way. The comedy aspects of the game shouldn't affect the mood of the art style because comedy is funniest when it contrasts against the dominant mood.