The shipping container names we use are mostly just arbitrary labels, designed to make it easy for a Merchant configuring a product to remember which type(s) of container(s) they'd configured for Shipping and want to use for that product. We could just as easily have labeled them as Container A, B C, etc.; they're only used as a method to calculate Shipping fees to add to each order.
The buyer never sees any reference to the type of container you've configured, and the types don't have any relevance to our standard USPS rate lookups if you're using that; you can actually ship in however many and whatever type of containers you wish. If you want to use the "Small Envelope" type to actually mean "huge crate", you're more than welcome to do that, and if your actual shipment can consolidate the order into one big box instead of an assortment of smaller boxes, you can do that too.
With one significant exception (which I'll go into below), our Shipping calculator treats each product type as shipping in its own, separate container apart from any other products. If you have Product A configured to ship up to 4 units in a Large Box and Product B configured to ship 2 units in a Small Box, a buyer's order for 1 unit of Product A and 3 units of B would include the cost/weight of one Large Box and two Small Boxes to calculate Shipping. Different products are not consolidated into each others' containers insofar as Shipping calculation goes; each different product in an order adds the cost/weight of its own container independently. Now, for the exception:
Our "Tube" container types can consolidate different products into a common container for Shipping calculation. The original idea there was that an order for small posters shipped in a Small Tube and large posters shipped in a Large Tube should just consolidate them all into one Large Tube. You can take advantage of this technicality to consolidate items for shipping calculation, even if you aren't literally using any tubes for real.
Products configured to ship in any Tube container will consolidate into the largest such Tube configured for a product in an order, up to the packing capacity specified for that product. If the example above for Products A and B were using Tubes rather than Boxes (all other factors being the same), then the shipping calculator would add your cost/weight for only one Large Tube, since the 3 unoccupied "slots" in A's Large Tube could be taken by up to 3 units of any other product that ships in the same or smaller Tube size.
Again, all this is only relevant for how Shipping fees get calculated and added to the order. However you choose to actually pack and ship the order need not correspond, and in most cases you may wind up slightly ahead on Shipping charged vs. your actual shipping expenses.