The shrub block exists purely for vanity. The shrub will only survive on a dirt block and, much like grass, will disappear if it doesn't have a source of light. You are unable to stand on a shrub, but you can walk through it freely with no movement impairment. It is purely for decoration and has no other purpose. It is currently the only vanity block.
It can also be used to block water. Water will not pass through it while the player still can.
With out sponge blocks, the shrub can be used to fill the space the player is standing in when filling a flooded area in a confined space, after the rest of the water blocks have been filled in.