Radar can not differentiate between various type of ships, or even with IFF systems, determine friends from foes with certainty. Relative ship size can only be estimated based on range of detection and pip amplitude. The accuracy and range attainment of FuMO26 was remarkable indeed.The Fumo26 radar could easily differentiate between various types of ships; it had a range of over 30km and very good range and bearing accuracy.
The optics were effective all the way to the optical horizon and/or to maximum visibility depending upon the conditions. Scharnhorst was tracking and ranging the Glorious by around 40km, but Marschall waited until the target was within radar range of Scharnhorst's FuMO22 (which is what it a fiited with with at the time) before giving it permission to fire at 26km.The systems on board Bismarck (especialy the main director) were only capable of detecting enemy ships at 25km maximum, while reliable tracking and ranging in battle conditions were around 20km.
Bismarck could have opened fire at any time inside of 36km with or without radar, but apparently Luetjens waited for target identification, and until the range was short enough to obtain more favorable danger space and hit %.