I'm no scholar on these things but this is my understanding.
Loppon Malcolm, "The problem with shentong, which CHNN has
addressed many times, is that in Dzogchen the result exists as a
potentiality of the basis; but in Shenton it is fully formed at all
times. For this reason, in several retreats ChNN has declared that
shentong is incompatible with Dzogchen."
In Dzogchen the result exists as a potentiality of the basis
along with secondary conditions as part of lhun grub or unafflicted
dependent origination. This means the result (buddha's qualities)
arises as one of the possible appearance of wisdom. But it is
nothing inherently existing anywhere, merely manifest when
conditions are there. It is in the form of actualizing buddha
nature through conditions. "in Shenton it is fully formed at all
times." - The buddha qualities in Shentong are inherently existing
in ourselves, so there is no need for any conditions and it is only
a matter of discovering something inherent. This teaching does not
factor conditionality in terms of result and may have a danger of
falling into a view ot true existence/inherency. That means the
luminosity aspect may be reified into something that truly exists,
that is one of the dangers. While non-shentong teachings of
madhyamika may have a tendency towards nihilism if wrongly
interpreted.
So when we understand the principle of potentiality, this means
nothing exists in and of itself, the basis is empty of any inherent
existence but has limitless potential that manifests according to
conditions.
Something I wrote before: "Buddha-nature is this total exertion,
it is not a hidden noumenon or a latent thing that ‘produces’ the
myriad things, nor is it something that truly exists hidden waiting
to be discovered – that is a mere dead image we form about
Buddha-nature that has come to past.
It is the entire universe of complete seamless interpenetration
that is ‘exerting’ Buddha-nature in a completely dynamic,
ever-advancing state of self-actualizing. We are not discovering
Buddha-nature so much as to be actually “creating” it every moment.
Or you can say we are simultaneously discovering, renewing,
creating, and casting-off Buddha-nature every moment (yet this
Birth and Death IS precisely No-Birth and No-Death)."