Hi
With applications still working with the sharded cluster, remove all other shards except for one shard that can hold all data of other shards (you can add a new big shard before doing this)
Point applications to this sole shard
Decommission the remaining unused sharded cluster infrastructure
Yes you are correct. Currently as of MongoDB 3.2, you can use these steps to convert a sharded cluster into a replica set (assuming your shards are replica sets). Essentially you are reconfiguring your cluster into a single shard, then using that remaining shard as a replica set afterward. This method is outlined in the page Convert a Cluster with a Single Shard into a Replica Set.
However, please note there is no guarantee that these steps will still work in future versions of MongoDB, hence the page Convert a Sharded Cluster into a Replica Set describes a “safe” method that will work for the foreseeable future.
Also, if you have a lot of shards, draining the whole cluster into a single shard may take much longer vs. dumping and restoring the collection. The tradeoff is, it does involve downtime during the migration process.
As with any operations involving major changes to your deployment, please remember to backup your data and thoroughly examine any possible failure scenarios involving your deployment beforehand.
Best regards,
Kevin