Does preparation of Shredded coconut make use of any bacteria/fungi?

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No it is not true that processing or preparation of shredded coconut require any usage of bacteria or fungi in any form.

The major reasons behind this is the anti-viral, anti-septic, anti-fungal and anti-bacterial properties of coconut.

The other good reason for this is the presence of lauric acid in coconuts, especially the grated and shredded ones. Lauric acid inhibits the growth of any microbe and thus prevents the degradation of shredded coconut.

Here are the major steps to shred coconut.