In short, in a state of calm the substance in which the shapeshifters are made of can perfectly replicatie every human organ and the body will act as so.

In a defense state it all turns back to that substance and combines more with the skin to be able to transform it.

the transform state turn all organs, skin and clothes (ha ha I included clothing) into the substance, then the being may transform into any shape they please. Note that shapeshifters cannot really grow in size but can only shrink. The way to grow is by obviously gaining nutrients and gaining weight.

If a shapeshifter become pregnant they cannot enter the transform state and cannot really enter the defense state either.

only 2 beings ever had this power

One of them is the only surviving Ancestor

The other gave her life to end peismas reign for eons.

But... she managed to get stuck in a intermundium.

Specifically the world of dreams

Uhm this world is confusing as hell but she was able to pass down her power, the only way to give her power without reproducing with the other shapeshifter, to Rosa.

It was a painful experience due to the substance having to eat every organ in her body. yes. Very painful.

And the substance breaks the laws of physics in many ways