Why is there a gap between my 3D model and the sleeve after I shrink it and how do I fix it?
There are two kinds of gaps between sleeve and 3D model.
The first one is the initial gap between the not shrunk sleeve and the 3D model. This is only a visual gap as we need a slight offset to the model in order to perform calculation for the "Adaptive mesh refinement" (which sub-divides triangles to get a smooth transition over edges). So in case the circumference of the bottle is 100mm, adding a sleeve of 100mm circumference will result in a slight visual offset between the model and the sleeve.
The second gap between the object and the shrunk sleeve is not only a visual gap but also a 'real' gap (though very small). This is a known limitation in the software. The gap distance can be decreased to its minimum by moving the Simulation slider to Accurate. In version 10, the slider can be found under Studio Toolkit for Shrink Sleeves > Preferences.
The gap distance will look bigger for small objects than for big objects.