I'm so glad you've brought this subject up Suz! I've been wanting to discuss it for a while.
First, for your outfit. I don't think this is terribly leg shortening, because your crotch point isn't covered up (I don't think, it's kind of hard to tell). I love that sweater, and of course with faded jeans, it would be more elongating. I'd like the maroon booties with the faded jeans combo, and I might try some booties that read "mainly dark" with this one--black or patterned dark--I can't remember what you have. This outfit looks super cozy and fashionable, even if it might surrender the leg line just a bit. I think a LOT of it depends on where your critical eye goes first. An average bystander might not zero in on leg length at all (and that's what I pray for in my case), but would check in that you're wearing an on trend, oversized sweater, then their eye would travel down your lean legs to your pop-of-color booties, and the very pleasing color scheme you've created. I tend to check out on others what I feel is lacking with my own figure, and I think most people do the same.
Okay, now! I was reading Lisa Pippus over the weekend, and she mentioned several times how much more leg lengthening tunics are, because they hide the crotch point, and you can't tell where the legs start! I'm still trying to wrap my head around that. Not sure if I agree, because I've drunk the Stacy and Clinton Kool-Aide and they always say, "shorten the top to the hip" to lengthen the leg line. I'd love to hear what you and others think about this optical illusion!