It’s kind of hard to tell exactly what’s going on from a picture but this is my best guess. So this ruffle looks like just a regular ruffle, which is actually just a rectangle of fabric. It’s a lot longer than other ruffles and doesn’t seem to be gathered much which makes it look more flowy than gathered. Usually a ruffle is 1 1/2 times bigger than the desired finished length. You may want to start with 1 1/4 times and see if you get a similar look. Probably what’s going on here is that the ruffle is attached to the top of the neckline with a basting stitch. Then this section is turned to the wrong side to create a casing for an elastic neckline. That would probably be the best way to get it snug around your shoulders and there’s a little bit of gathering at the top. The bottom of the casing can be stitched through to only the shirt portion and not the ruffle so on the right side of the garment you don’t see the stitches of the casing, instead this is covered up by the ruffle. On the left and right side, there seems to be an extra layer of ruffle, this might actually be the sleeves to create that effect. Hope this helps!