Bombs hit by Shovel strikes are sent back as if they were parried by a shield. However, bomb power is 20% of shield-parry values (18 base damage instead of the usual 90 base damage).
The second hit in the combo knocks enemies back, and the final hit sends them flying away for 1 second.
"Secrets found in the walls and ground are of increased quality."
Notes
Shovel’s legendary affix ‘Secrets found in the walls and ground are of increased quality’ can only be triggered when Shovel is in the main hand. It's possible to carry the Shovel in the backpack and swap it into the main hand breaking a secret wall marking.
Trivia
The Shovel may be a reference to Crypt of the NecroDancer, specifically to Eli, whose playstyle involves pushing bombs around.
It may be a weapon themed after the Graveyard biome as the in-game Graveyard is where common villagers are buried, and the shovel is presumably used to dig their graves.
The Shovel may also be a reference to Shovel Knight, as it can also be found by breaking a wall beside the campfire where you first find the King Scepter.