There is a tapered conical section where the chamber makes the transition to the bore, called the forcing cone. The diameter of the chamber is somewhat larger than the diameter of the bore. There is concern that when a 3" shell is fired in a 2 3/4" chamber, the crimp will unfold in the forcing cone, and cannot open completely; the load will have to squeeze through. The situation with a paper shell would be worse than if a plastic shell were used, and the type of wadding would also make a difference, as would the actual measurements of the chamber, forcing cone, and bore, whether the barrel is backbored, etc.
As pointed out, it is not a wise practice.
Given the number of 2 3/4" guns, and the amount of 3" ammunition, I suspect that it is not all that rare for the longer shells to be fired in shorter chambers. Too many guns and too many shells out there for it not to happen from time to time.
How many documented cases are there of guns being burst?