Using Shopkeepers-2.7.0-20190508.225429-1.jar and Paper 21
https://papermc.io/ci/job/Paper-1.14/

If paper.yml has
keep-spawn-loaded: true
keep-spawn-loaded-range: 10

Shopkeepers will duplicate infinitely (becoming normal villagers) if outside of spawn loaded range.
Have yet to figure out what causes it, likely has something to do with chunk load/unload.

Additionally, turning off gravity in shopkeepers config file still makes them fall down for me.

This did not occur in 1.13 shopkeepers.

P.S.
All shopkeepers saves/configs have been updated to 1.14.1 paper without any issues.

Can you please try to reproduce your issues on the latest version of Spigot? Paper has additional changes on top which I am not familar with, so I can't help you if this is paper-specific / it would take me additional time to find out which paper-specific changes are causing this, in case this does not also happen on Spigot.

Edit: Regarding entities duplicating outside the spawn range: This does indeed sound related to the chunk load/unload issue pointed out here: #562

Edit2: Regarding disabled gravity: Make sure that you don't have the legacy mob behavior enabled in the config (should be disabled by default though).

Closing this as duplicate since #562 is already concerned with issues regarding running Shopkeepers on 1.14.x