It doesn't shrink, it just learns to stay behind the glans. You end up with a wrinkly build up of skin behind the glans. I personally think being properly circumcised would be better, this is just a simple "no cutting required" alternative.
Incidentally if you do this before puberty your foreskin never grows and you end up with something that looks like a proper, tight circ. I read a statistic somewhere that said about 10% of all uncircumcised men had foreskins that didnt cover their glans presumably because of this reason, they had stretched the skin before puberty so that when their penis grew it sort of slipped through the foreskin and grew out away from it rather than taking the foreskin wih it (as would happen with the more common, tight foreskin).
IMO i think this is the best solution, to have no foreskin without having it cut away: I'm a fan of the circed look and prefer the feel of my now permanently bared glans. Unfortunately i missed that boat, went through puberty many years ago without knowing about this. Damn.
Anyway, if you wanna know what this looks like (someone with a normal length foreskin that's permanently skinned back) check out my pics in my signiature. The flaccid pics are what my dick looks like 24/7. Sorta circed but with a buildup of skin and no scar. Might get circed one day. Want to but probably won't bother.