I'm not familiar with 50/50 bamboo cotton but am with 70/30 so this is based on that.

You should expect shrinkage of 1 - 2cm per metre

I've only ever done one wash before sewing but I finish it off in the dryer. By finishing off I mean hang it on the line till it's mostly dry then put it in the dryer.

Is it fleece? It will shed a lot of fluff if it is fleece (like windcheater material).

Preshrinking is the way to go because if you sew before it will then shrink under the stitching and it will look bad and might fray if the overlocking doesn't sit right.