As John has said whether you use LW or SW for the connection to the director has no bearing on what the connectivity and distance is for the ISLs between the directors
The selection of LW and SW is all about the cabling and optical characteristics of a single cable connection. So you might have a LW connection between the Z server and the FICON director and a SW connection between the DS8000 and the FICON director.
SW connections support a much shorter cable distance than LW connections and every splice or patch panel in the cable will further reduce the supported distance. So in many cases for Z clients a SW connection will not support the structured cabling and patch panels that clients use. However if the connections are direct between two systems next to each other then SW is perfectly fine.
The Z team has a lot of documentation on this and I've included a link below
https://www.ibm.com/docs/en/systems-hardware/zsystems/9175-ME1?topic=library-planning-fiber-optic-links