@motorollin
I have 8.1 running here on Shapeshifter and it works fine (BB2 and all).
It's been a long time, but I do remember the install being tricky. It seems like I may have ended up doing the actual install in Basilisk on Windows (they can use the same hard files).
My config:
Graphics: CyberGFX/P96 (8bit), Black border -- nothing else checked
Memory: 8191kb, Alloc MacRom first, Any memory
Miscl: Everything checked but write-protect ROM (greyed here) -- IMPORTANT that MacOS 8 Mode is checked
The ROM is from my LC/Performa 575 (an old '040 Mac)
Hope this helps.
-Ken