DBCC SHRINKFILE on the distribution database

It is ok to shink the datafile, there WON'T be any data loss.

The "issues" when shrinking could be performance, during the rellocation of data pages. Also if you know that your DF will grow again to the same size, shrink is not recommended. If it was because a one time only operation, or other stuff where the DF won't grow at the same big size again, it is ok to perform your shrink operation.

You need to check WHY the distribution database is growing rather than trying to shrink. If there is no available free space inside the file then you will not be able to shrink it anyway.

Check for the retention period and any other reasons why the distibution database would be growing e.g. Replication is erroring out.Below blog would give some areas you can look into :

Distribution database growth

Answering your question exactly : Yes you can shrink the file ,given it has free space available.