When the disc is in the middle of the field, the 'cup' is inverted. The middle person marks and the other two sit in the main throwing lanes. Their job is to make upfield passes look hard and make the handler throw wide swing passes.
If the disc takes a short swing, keep the inverted formation.
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As the disc moves closer to the sideline, the cup now looks like a more traditional cup. However #2 is playing more aggressive on this handler and taking that option away.
If a handler charges up field, the cup lets them go. #2 is looking for the next handler. This is why they may chose to face guard or face the disc.
Since there is now another defender in the downfield space, all wings, the short deep and deep deep need to notice and shift. This leaves the furthest player from the disc unguarded. That's fine! Notice that players are shifting TO PLAYERS not just shifting spaces. They make shifts onto new defenders often with the direction the disc moves. Usually its the wing that is furthest away that needs to shift to help the short deep in the middle of the field.
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Notice in this formation, the middle handler is pretty far back. The #3 defender is going to hold shape in this case, instead of marking up on the middle handler.