Ah, by discontinuities I mean places where a shade suddenly stops. Basically, if you're looking at a fold, the lighting at its most raised edge is
probably going to be different from the lighting on the fabric immediately behind it.
Here's a really extreme example in pretty much every respect (your fabric is neither this wrinkly nor this shiny, but its wrinkles are liable to be less flowing as well - these are really folds, but those are basically just overblown wrinkles, if you think about it).
So, in cyan is the subtlest thing - you can see from lower down that that's an edge continuing up, but the lighting isn't so strong as to give it a hard line. But your eye can still follow it because the lighting on the upper surface is lighter than on the lower, because they're at different places in space, even if they're adjacent in the image.
In green, you've got highlights. Nothing particularly fancy, that's just how wrinkles look when you can see
both sides of the peak because you're looking at it top-down, and it doesn't flop back over itself.
In blue, you've got a more sharply defined edge than the one in cyan. That's what you wind up with when the lighting on the fold starts to go to shadow from your perspective, but the fabric directly behind it is fully lit.
Note that I am bad at explaining things because I haven't had a formal art education that involved this kind of thing since the 10th grade, and I spent most of that playing Scorched Earth 2000. So if my terminology is confusing or something, let me know. Also, in your improved version, it looks like he's lit from below - is that intentional? The lightest parts of his uniform are the bottom edges, and his leg seems to cast a shadow
upward. I think the perspective on that shadow could also use some lining up with that of the edge of the leg itself - that shadow is literally the only thing telling your brain how long his thigh is, and right now it feels off, like it's at an impossible angle or something.