Since it is not stated in any documentation, I assume that the shadowbox module which accompanies the shadowbox system plugin is just a way to override the plugin's display settings by activating the module on selected pages from a hidden position. Is that correct?
yes that is correct dpk.
Two reasons actually:
1. sometimes plugins don't fire on component pages (FB, CB, etc)
2. it allows us to choose which pages we want the shadowbox js to load on. eg. If you're only using shadowbox on a Gallery page, it would be a waste to load it on the home page as well.
Personally, I always choose the module over the plugin.