The Shovel knows the difference between "soft ground" and "stuff that falls on your head" - it digs the two completely differently, automatically, based on what you actually hit.
Hit any shovel-mineable block (dirt, sand, gravel, clay, and the rest of the shovel family) that isn't a falling block, and the shovel carves out a genuine spherical volume around your hit point - every block within a fixed 2-block radius is broken, dropped, and cleared in one go, the same radius at every tier. The sphere is clipped so it never reaches more than 1 block below where you clicked, so you're not accidentally digging out the ground from under your own feet.
Hit a falling block instead (Sand, Red Sand, Gravel, Concrete Powder) and the shovel switches modes entirely: rather than a sphere, it drills straight upward through every block of that exact same type stacked above it, one after another, until it hits something different or the world height limit. Perfect for punching a clean shaft through a sand dune or gravel deposit without triggering a cave-in of collapsing blocks on your head.