Or equivalently, if you are inside a shell (sphere outside, hollow sphere inside) then the gravitational effect is zero. This can be explained by analogy with light which also follows the inverse square law--changing your position inside a hollow sphere does not change the fact that you see the sphere all around you. Same reason that there is no electrical field inside a hollow conductive object.

You can use this law to see what's the gravity fields as you move under ground and in other very symmetrical cases.

It doesn't break it at all. The meter above you can be treated as a hollow shell, which surprisingly has zero net pull, and the solid sphere below can be treated as a point mass just as before.

Just remember these two facts, each provable with a simple integral calculation, usually done in high school physics or freshman college physics: a uniform sphere has the same gravitational pull on an object as a point mass at it's center, and the net gravitational pull on an object inside a spherical shell is zero.

This all works under perfect spheres, uniform (at the spherical shell level at least) density... There are other cases it works, but this simple case is the basic idea.