Hi @SimonGIS thanks for reporting this! I have sent you a direct message with my Esri email if you are able to send the shapefile dataset so I can reproduce the issue on my end and investigate.
If you open browser network tools and watch traffic, when proceeding to the "Confirm Schema" page the Velocity frontend sends the backend a "sampleMessages" call. In the response body there should be a featureSchema > geometry object where the backend determines the geometry type. Is this included in the sampleMessages response?
You are correct that the expected behavior is Velocity automatically handles shapefile geometry according to the information stored in the file. Looking forward to your reply.