Hi
K2 is one of the extensions directly providing support for sh404SEF, instead of sh404SEF providing support for it.
This means sh404SEF manages the URL in the URL manager as usual, and all the features are the same, but when we need to build a K2 URL, we use the sh404SEF plugin that comes with K2, so it's not really sh404SEF deciding how URLs are built.
In addition, K2 has an "sh404SEF" section in its configuration section to let you choose how URLs are built so this is where you want to look.
Rgds