No, no shock waves. There may be some cracking of the surface as the material tears (in tension) as well as shearing of the chip from the base material.
There are micrograph videos of cutting tools in action, check those out.
Actually, there may be shock waves, in certain materials. Zinc and tin come to mind, as materials that can exhibit supersonic slippage. In effect, you're "cracking" a crystal along a plane, and it slips very suddenly as the tension is relieved. The shock is limited to the width of a given crystal. In bulk, this manifests as "tin cry", a crackling sound emitted as the material is bent.
The way that deformation works, is slippage planes in the crystal lattice. The reason work hardening occurs, is those planes do not slip evenly, creating dislocations. The paths of dislocations (like line faults) flow through the crystal in 3D; if two paths slip into each other, they can annihilate, or they can entangle. The general accumulation of overlapping defects is what gives rise to work hardening. Eventually, so many defects accumulate that the material tears apart (it is too congested to slip in an orderly manner anymore), and a crack forms.
What distinguishes ductile metals from brittle substances, is the number of coordination sites per atom, and the electron density. Ionic crystals are brittle because they have relatively low coordination; when a slip occurs, the planes rarely line up correctly, and a crack forms almost immediately. Metallic crystals have many sites so that, even if the planes no longer line up properly, the atoms can still share electron orbitals, and maintain a bond.
I think.
You can still have ductile motion in typically brittle substances, but it's much rarer to see, most often on the microscopic scale where more perfect motion is possible. Example, the marks left from grinding and polishing. Sometimes a smooth track is left, implying a fairly smooth cutting process; other times, it's a jagged track where material was effectively chipped away from the base. I would guess the relative amount of each type depends on the angle and pressure of the cutter, and the material properties. In a typical ground face, the cutting angles are random (angular bits of grit), so the relative mixture of both speaks to the properties of the base material.
Tim