The root √DAY appeared in Definitive Linguistic Notes (DLN) from 1959 beside √NDAY “dreadful, abominable, detestable”, possibly having that same meaning (PE17/151). In this note Tolkien said that in Quenya √DAY was not used, and that the strengthened form √NDAY was in Quenya blended with √NAY “cause bitter pain, grief”.
I suspect that the “dreadful” meaning applied only to the strengthened form √NDAY, since the unstrengthened form √DAY is the most likely basis for the adjective ✶daira > S. daer “great, large” (VT42/11), as seen in names such as S. Athrad Dhaer “Great Ford” (WJ/338) and S. Lond Daer “Great Haven” (UT/263). In the sense “great”, √DAY may have been a restoration of the rejected root ᴹ√DAƷ “great” from The Etymologies of the 1930s (EtyAC/DAƷ).
Whether √DAY meant “great” or “dreadful”, it seems to have replaced another root from The Etymologies of the 1930s: ᴹ√DAY “shadow” (Ety/DAY). The Noldorin word N. dae “shadow” was an element in the 1930s names Daedhelos “Shadow of Fear” and Dor-Daideloth “Land of the Shadow of Dread” (LR/405). But in the aforementioned 1959 note, Tolkien derived S. daedelos from √NDAY and translated it as “horrible fear” (PE17/151), consistent with the name Sindarin name for Mirkwood: Taur e-Ndaedelos “Forest of the Great Fear” (LotR/1134). Likewise in later versions of the Silmarillion, S. Dor Daedeloth was translated “Land of Great Dread” (WJ/183) with no mention of “shadow”. Thus it seems ᴹ√DAY “shadow” was abandoned.