I'll give an explanation of what I'm seeing and then below each explanation, will be the corresponding screencap(s).
As the ball is played, both players are heading left. It goes behind the attacker, who then bends his run and changes the angle more towards Cancelo. Cancelo's path barely changes.
Just before the attacker is within playing distance you can see how much the angle of his path has changed, where Cancelo's still hasn't changed much.
As the attacker arrives close enough to touch the ball(below), you can see Cancelo commits to the shoulder to shoulder here and I believe he is justified in doing this. Others may not agree but I've covered both bases, whether it's in playing distance or not because of who is moving into who's path. To me, he's close enough to player and ball and they are both in full sprint. The time to halt his run would have been before this point(but he was under no obligation to do so, because of the relevant highlighted parts of the law quoted above), as his momentum would likely have been too great to avoid contact.
The players first touch(above) was a kick-on but Cancelo had already committed to the challenge before it left his foot. As the contact came(below), it's either in playing distance of neither or both. You can see the kick-on is headed slightly to his right(I'd have liked another frame to show where the ball ended up but hit the BM limit per post), taking his run further into Cancelo's path.Who's path didn't change much at any point. Cancelo's foot looks quite close to the ball to me, in that picture also but I don't think that's as relevant as when he committed to it(before the ball left the players foot) given the speed they were running/momentum of both players. On the reverse angle, you can see the first contact, is Cancelo's left arm briefly came across the player first and then the player leans his shoulder in front of Cancelo's, denying him the shoulder contact. Not that it matters but the attacker's standing foot also looks outside the area in the below image, never noticed that before.