canvas problem

Looking at the example in your attachment, if you are used to applications like Adobe Illustrator and InDesign, then yes, Photoshop works differently. But it is not necessarily wrong.

In Illustrator and InDesign, yes, when you drag an object partially off the artboard, you can still see the entire object. I think this philosophy goes back to the early graphics applications like Aldus PageMaker, which was designed to work as a “page” surrounded by a “pasteboard” where non-printing items could be stored until you want to put them on the layout. 

But Photoshop is designed to work more like photo paper, where any part of an image beyond the edge of the paper is not visible. By the way, I tried a couple of photo editors that are not by Adobe, and they work the same way as Photoshop. So even if you switch to a different company’s photo editor, you will find out it works the same way there: Image content visibility stops at the canvas edge. 

Image > Reveal All will show content outside the canvas. It actully expands the canvas to include all such content.

Your image attachment is showing Photoshop CC. You are seeing the bounding box after moving your object. This is not the crop shield. The bounding box will disappear after selecting another tool, e.g. click the hand tool. Then you will only see the portion inside the canvas.

It doesn't.   It shows what is on the canvas only.   

what app?

p.s. don't attach screenshots here.  copy and paste them into your post.