Incase you are all wondering:
Shadowplay DOES WORK. You must have full screen enabled. Windowed mode cannot be enabled in order for shadowplay to work. This has NOTHING to do with Rust. This is something on Nvidia's end, but when it's in windowed mode you cannot use Shadowplay.
I would advise you guys submit this feedback to Nvidia, not to the Rust devs, as it does not pertain to the developers of any game, only the developers of the software.
As I've noted several times in the thread, I understand that Shadowplay can only work in fullscreen mode, and I have gone to great lengths to ensure the game is running full screen and not windowed.
I would not be certain that this is not an issue on the game's end. I have no problem running Shadowplay with most games. Rust is one of the few that it seems to have issues with. I've gotten it to work in the past, but it's highly unreliable. I still strongly suspect it has something to do with how Rust runs in fullscreen mode, and whether it's truly running fullscreen or something that could be interpreted by the Nvidia software as full-windowed or something like that.