Just finally getting better – brutal couple weeks!
Currently, the plugin needs to have args set to tell it what posts to display.
In order to achieve something like this, the plugin would need to take the current queried object (tag, category etc..) and use that data to display posts.
I would like to add the ability to add args into the shortcode itself to overwrite the ones set when creating the post list. When that happens, something like this could be possible as you could simply overwrite the taxonomy/term inside the template file.
I’ve gone ahead and added this as an enhancement so I don’t forget about researching it: https://github.com/tomusborne/wp-show-posts/issues/2