Purport

This is one of the most important Shlokas, particularly in the present environment where a lot of confusion has been created by some anti-Hindu forces and even some groups of Hindus, about the shape of God.

The above Shloka gives a very clear answer. Bhagvan Shri Krishna made a clear declaration that he is not an un-manifest entity neither His physical form is conditional. Those who think that God is un-manifest(without shape) is wrong.

Bhagvan Shri Krishna explains He is immutable and unsurpassed. He does not change or mutate.
Some people may ask a question here, what is Incarnation then?
The answer to this question exists in Ch4: Sh6, where Bhagvan Shri Krishna has explained that Incarnation is the re-adjustment of his Maya and not his forms. He subdues is Maya to appear in front of people in a particular form.

Although I am birthless, imperishable and immutable and the lord of all living beings, yet by subduing my nature, I appear in this world in My original transcendental form by my divine potency.
(Ch4: Sh6)

Whatever change in physical appears is due to the variation in physical potency of God, which is called Maya, but God has its own original divine forms. He is not a shapeless entity. Above shloka removes all confusion on this subject.