I have 418 chocolate coins in my inventory. It only shows that I have 8 in the fall festival shop at the bottom right. Does it cut off the 41 in 418 when it is displayed in the shop or is there some kind of complicated conversion amount when they go into the fall festival shop?

You have to use them in your inventory to put them in your "wallet"

The coins in your inventory are a separate thing from the coins in the shop/ for entrance to the Haunted House/ To buy cauldrons for brewing, in that you haven't 'used' the ones in the Inventory.

In the inventory, you can split stacks, trade them to other people, or sell them. Once they're used they become an 'active' currency, so to speak, and are only usable by you, for the shop, HH, and brewing.

Once used they cannot be sent back to the inventory.