Any timwe you have a source of light in front f the camera, anywhere, not just in the field of view, light enters the lens at an angle and bounces around inside the lens. This will reduce contrast and mute colors. This will be odserved as a slight "fog" on the image. A worse case will be huge flair spots. Flair spots are usually connected to the light source being in the lens coverage area.
Anyway a lens hood will reduce outside light increasing color and contrast.
Lens hoods also make great lense protectors.
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