The user can alter a targets form into another form that shares the original’s nature. However it doesn’t change the substance or the "soul" of the target.
In simpler terms, if you are holding an object, you can instantly transform it into any other variation of that object. As long as the purpose of the item stays the same, the form is yours to control.
A ceramic coffee mug can become a sturdy glass bottle, a fancy wine goblet, or a massive wooden bucket. It always stays a thing that holds liquid.
A small pistol can be swapped into a long-range sniper rifle, a heavy shotgun, or a compact submachine gun. It always stays a thing that fires bullets.
The more drastic a change, the more cursed energy is required. Also the technique is largely built off the users perception of a targets form in relation to its nature, so what a user can and can’t alter a target into is largely up to their own interpretation.