Probably what happened here is that your git repo got stuck in an inconsistent state (most likely do to an incomplete checkpoint commit). Once there it couldn’t commit checkpoints any more which is why you had a few files that weren’t committed (and then the merge errors and the subsequent problems, which were continuations of the problems with your repo).
With your project name I could have looked at our logs to see what the error messages from the git operations were but we might be able to do a better job of delivering at least some info to the user when this happens.
Shrinkwrap.yaml is a file used by pnpm to keep track of your package installation.
Sorry for the bother and glad you got it worked out!