"instead of playing this card during your event phase" is proscriptive. You cannot play the card during the event phase. The reason the clause is there is to make it clear because normally, that's when event cards are played.
“Shadows: Instead of playing this card during your Event Phase, you may play this card when a Common or Champion Shadow Elf unit that you control is destroyed and placed in an opponent’s Magic Pile. Remove the destroyed Unit from your opponent’s Magic Pile and place it face down on top of your magic pile.”
The first part of the power states that it is used outside of the Event Phase. After the comma, the "you may" means that you don't have to play it when one of your Common or Champion units is destroyed. It means that you may play it when one of those units is destroyed.