In the image I posted above, the right hand spotlight (with angular falloff) is shining through fog, and this produces a hard edged light.

The same spotlightcube was copied and pasted to the left hand side of the image, but with no fog, and the light cone creates a soft edge as it should.

I would have thought that the combination of fog, soft edged shadows, angular falloff etc would add to the softness of the outline and not make it harder.