Just like Punk Hazard became an island of permanent fire and ice, I suspect Judicial Island gained eternal daylight due to a former awakened Pika Pika user working for the WG.
In combat, sunlight becomes become so intense and so bright that nobody except the Pika Pika user can use their eyes. Kizaru blinded Hawkins like this. They effectively have to fight Kizaru with observation haki at all times which can become a big drain in stamina battles. It's possible intense sunlight can burn your skin and shower your body with harmful radiation, but I don't think Oda will go that far.