A treachery card (The Necromancer’s Reach) is dealt as a Shadow Card on an engaged enemy in Enemy Attack during Combat Phase. It reads “When Revealed: Deal 1 damage to each exhausted character.” . This isn’t a Shadow Effect. So do we ignore this effect when it is revealed as Shadow Card?

Correct. Cards dealt as shadow cards are never "revealed," and all of their text is inactive, except for the shadow effect itself.

This also includes passive effects such as on Banks of the Anduin, which would not return to the encounter deck when dealt as a shadow card.