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IIRC "shadow profiles" are the profiles Facebook builds of non-users based on data those people didn't share, like their friend's contact lists.From a development standpoint I clearly defined the 'shadow profile' you just explained.
Facebook provides OpenGraph APIs that app developers can access personal data that is granted by a user. Previously to OpenGraph v2 you could access all friend data and pull down the whole social graph for any friend level shared data through one initial person, those were shadow profiles. For each individual permission you only needed one friend to agree to it if the other friend shared at the privacy defaults of friend access to everything.
That has been shut down at of OpenGraph v2, look back on that time where they added it, lots of scammy sites were mad they couldn't build shadow profiles anymore. I built games on Facebook at the time and this was obvious to many game companies that were just there to collect data on users to sell not about the game. Remember all the birthday apps and zombie infection games? All data syphons. Facebook shut it down back then, not really because of privacy but partly, mostly largely because they were scared other companies were getting access to the whole social graph like many did including Zynga, CA, others.
Were 'shadow users' a problem, yes, but go try to pull friend data or personal messages today, those are unique permissions you have to be granted by each user that you access and for each action, you also have to undergo a Facebook app review and justify use of them like you do with background geolocation on Apple.
Part of this attack on Facebook is to bring in the government filter and firewall [1] as an extension of FOSTA / SESTA and most of these issues are resolved at Facebook already.
If you don't want a government censorship filter [1] that the ISPs and large companies like Facebook will run, then understand that this is opening that can of worms.
[1] https://www.wired.com/2017/04/internet-censorship-is-advanci...
EDIT: for the people arguing details about 'shadow profiles'
> So what is a Facebook shadow profile, and where does yours lurk? [2]
> A Facebook shadow profile is a file that Facebook keeps on you containing data it pulls up from looking at the information that a user’s friends voluntarily provide. [2]
> You’re not supposed to see it, or even know it exists. This collection of information can include phone numbers, e-mail addresses, and other pertinent data about a user that they don’t necessarily put on their public profile. Even if you never gave Facebook your second email address or your home phone number, they may still have it on file, since anyone who uses the “Find My Friends” feature allows Facebook to scan their contacts. So if your friend has your contact info on her phone and uses that feature, Facebook can match your name to that information and add it to your file. [2]
[2] https://www.digitaltrends.com/social-media/what-exactly-is-a...