The distance is calculated using the standard formula ((x1-x2)^2+(y1-y2)^2)^0.5. Therefore, you can observe the following scenario. A precise shot (and a direct one, respectively) will hit all enemy creatures that have crossed the red border (in the picture). Also, it clearly shows the change in damage.
A difference of plus or minus one cell in distance doesn't matter much; I am more concerned about one-shot kills, which is why I would like to abandon this ability.
------------------------------------------------------------------
I have two more options:
Option #3

Changes only affect the crossbowman. The unit receives damage comparable to the alternate upgrade version + the "Stunning Arrows" ability, which has a certain chance to delay the target's turn.
Option #4


Crossbowmen receive all abilities from the original Archers version, plus increased minimum damage by 1 point.
Archers lose shooting without penalty but gain consistent high damage + the "Empowered Arrow" ability, which permanently reduces defense by -50% and has a chance to knock back the target by 1 cell.
Options 1 and 2 can be found on page 4 of the topic