This new in 11g feature is very similar to resizing temporary tablespace files. The main difference is that while resizing the RDBMS is able to cut off only not allocated space, while shrinking additionally is able to deallocate space, which is free and a subject to reuse.
So there is no analogy to shrinking tables for example. There is no data movement. If in the area of a cut there exists an object used at the moment, shrinking is of course able to return back only the space between the end of a last such object and the end of a file.
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