{shorthands} is about the language-specific special active characters (e.g., for quotation marks and {hyphenation} characters) of the {babel} package.
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Babel shorthands has a problem with \bm package
Using the babel command \useshorthands{"} prevents \bm package to work normally.
\documentclass{report}
\usepackage[T1]{fontenc}
\usepackage[english]{babel}
\useshorthands{"}
\usepackage{bm}
...
