yup, that's one of the features of shrink that gives it an advantage over many of the pay tools.
unfortunately, you cannot retain menus in reauthor mode in dvd shrink. (most pay tools allow the retention of menus, but less exact cutting...it's usualyl an either/or situation)
i do, however, know that clonedvd will allow splitting at chapter boundaries and you can retain menus on both discs if that is important to you. a 21 day free trial can be obtained from www.slysoft.com
i have both tools and use them both about equally. they each have their plusses and minuses for sure.
shrink offers exact cutting, but clonedvd is mroe flexible with keeping menus. shrink allows mixed compression and deep analysis, but clonedvd is much faster with a comaprable quality output (some will argue this point)
i suggest you give both a try. both are very worthwhile programs!