In brief
The shadow is drawn around the box without distancing the adjacent elements.
Useful to know
box-shadow adds one or more shadows to the box. Displacement, blur, and expansion determine their appearance, but the shadow does not increase the space the element occupies in the arrangement. [1]
In box-shadow: 0 4px 12px #0003;, a card can visually enter its neighbor's space. If real distance is required, set gap or margin separately . inset moves the shadow inwards. In a few shadows, the first in the list is at the top; this is important when a thin decorative line should remain visible.
Sources
For further detail and to check the information: