I thought the purpose was to pwm the shunt circuit so the current gets diverted from the leds to the shunt and thereby achieve dimming without interrupting the current output from the constant current driver. is this right?
No.
The purpose of the shunt is the current produced by your LED driver is 700mA, your LED actually needs 350mA so the shunt will take that excess current.
However, if the resistor turns out to not drop more voltage than the LED needs it won't work at all.
You are clearly not getting this and it is not a proven design it is just an idea, so I don't think you are not up to trying this. Just forget it and get a constant current drive of the right current value and get one that is designed to be controlled by PWM.