Some people will tell you that paracord should never shrink. Others will tell you that all paracord shrinks by 5 or 10 percent when dipped in boiling water. These two groups may engage in spirited debates online which tend to just utterly confuse the new craftsperson.
Besides the testing process, the major step missing from commercial paracord that milspec paracord is subjected to is a final steam bath. This causes the mantle (outer sheath) to tighten up slightly, and therefore milspec paracord doesn't have a shrinkage problem. This leads many people to believe that paracord does not shrink because the stuff they used in the Army didn't shrink. The kern (inner strands) of mil-spec cord never shrinks either, and the shrinkage of commercial cord in that area is a less clearly-defined subject.
So, military cord does not shrink. But, commercial paracord definitely can shrink or tighten up some when it's subjected to some moisture and heat. Depending on the application, the shrinkage can be imperceptible or vital. For example, most solomon bar bracelets won't shrink MUCH if the knots are tight. But, a wrapped staff or bottle will tighten up quite noticeably when it's been hit with hot water.
If you're trying to avoid shrinkage in your final product, a few minutes in hot water (boiling is overkill - if you have a hot tub around, mass production time!) will ensure that the mantle tightens up and the final product won't vary over time (definitely heat-seal one end of the cord or you'll have a fun time). If you're wrapping something and want the wrap to be permanent, don't shrink the cord until you've finished the tying and tightening, then a quick dip in that hot tub will cause it to virtually adhere to the staff or bottle.
There is a lot of debate on this, and you'll need to make up your own mind on what you want to do. The famous Mr Coop is on record against the practice. Kevin Gagne (The Paracordist) takes the opposite view.