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Yes, the British soldier would be in LOS if he was one hex away from the hill. The level 1 hill hexes (M1, m2, etc.) only project a 1-hex blocking shadow for a unit on a level-2 hex looking at a target on a level-0 hex. And if K4 was a level 1 hex, the blocking shadow projected by, for example, M2, would be 3 hexes long