Translucent effects generally fall into a few categories: volumetric, volumetric but dense enough to have normal information, and surfaces. Different lighting techniques are needed for each of these, so a material must specify the Translucency Lighting Mode that should be used.
Lit translucency gets most of its lighting through a series of cascaded volume textures oriented around the view frustum. This allows lighting to be known in a single forward pass for any point inside the volumes, but has the downside that the volume texture is fairly low resolution, and can only cover a limited depth range from the viewer.
The volume is configured through cvars that can be set differently based on the scalability level:
r.TranslucencyLightingVolumeDim, which defaults to 64. Raising this by a factor of 2 increases the cost to light volume by a factor of 8.
r.TranslucencyLightingVolumeInnerDistance, which defaults to 1500. Raising this increases lighting volume coverage but reduces effective resolution.
r.TranslucencyLightingVolumeOuterDistance, which defaults to 5000. Raising this increases lighting volume coverage but reduces effective resolution.
Shadowed direct lighting from all movable light types is injected into the translucency lighting volume. Light functions are also taken into account.
Translucent materials receive diffuse GI from the Indirect Lighting Cache. Only one lighting sample is interpolated, at the center of the object's bounds. There is only one sample taken for the whole object, even if it is a large particle system. The indirect lighting interpolates over time if the bounds center changes, so it does not pop.
The left sphere is lit translucency using the Indirect Lighting Cache, the right sphere is opaque with baked lighting from Lightmass.