WordPress Full Site Editor navigation blocks don't render shortcodes. This gist will execute shortcodes in FSE navigation block attributes.

wp_shortcodes_in_fse_blocks.php

<?php
namespace charmoney;

/**
 * Execute shortcodes in FSE navigation block attributes.
 *
 * Supports wp:navigation-link and wp:navigation-submenu plus potentially others.
 *
 * @param array $items Navigation block items.
 * @return array Filtered block items.
 */
function block_core_navigation_render_inner_blocks( $items ) {
	$shortcode_attrs = array(
		'url',
		'title',
		'label',
	);
	// Loop through the items top level.
	foreach ( $items as $key => $item ) {
		// Execute shortcodes in top layer nav items.
		foreach ( $shortcode_attrs as $shortcode_attr ) {
			if ( isset( $item->parsed_block['attrs'][ $shortcode_attr ] ) && ( false !== mb_stripos( $item->parsed_block['attrs'][ $shortcode_attr ], '[' ) || false !== mb_stripos( $item->parsed_block['attrs'][ $shortcode_attr ], '%5B' ) ) ) {
				$item->parsed_block['attrs'][ $shortcode_attr ] = do_shortcode( urldecode( $item->parsed_block['attrs'][ $shortcode_attr ] ), true );
			}
		}
		// Inner loop through $item->inner_blocks.
		foreach ( $item->inner_blocks as $inner_key => $inner_item ) {
			// Execute shortcodes in second layer nav items.
			// NO SUPPORT for lower layers, just two.
			foreach ( $shortcode_attrs as $shortcode_attr ) {
				if ( isset( $inner_item->parsed_block['attrs'][ $shortcode_attr ] ) && ( false !== mb_stripos( $inner_item->parsed_block['attrs'][ $shortcode_attr ], '[' ) || false !== mb_stripos( $inner_item->parsed_block['attrs'][ $shortcode_attr ], '%5B' ) ) ) {
					$inner_item->parsed_block['attrs'][ $shortcode_attr ] = do_shortcode( urldecode( $inner_item->parsed_block['attrs'][ $shortcode_attr ] ), true );
				}
			}
		}
	}
	return $items;
}
add_filter( 'block_core_navigation_render_inner_blocks', __NAMESPACE__ . '\block_core_navigation_render_inner_blocks' );