I think you are being distracted by the command to shuffle the list (it makes you look for the not shuffle command). That shuffle command (on every list) is a recent addition. On older iPods (when they had a monochrome display and a click-wheel), there was no shuffle command, except on the main screen (to shuffle all songs). Shuffle was just a setting, not a command. The iPod was set to either shuffle songs or play songs in order. And when you played any song list, songs were played in list order or in random order, based on the current shuffle setting.
So, what you are doing is simply playing your selected song list. It plays in list order or in random order, based on the current shuffle setting. The command to shuffle is irrelevant. Pretend it's not there.
That shuffle command is there as a convenience. When you use it, it always shuffles the list, even if the iPod is set to not shuffle. The shuffle command lets you shuffle the list (as an exception) while keeping the iPod set to (normally) play play your lists in order.