Shape modeling research in Computer Graphics has been an active area for decades. The ability to create and edit complex 3D shapes has been of key importance in Computer-Aided Design, Animation, Architecture, and Entertainment. With the growing popularity of Virtual and Augmented Reality, new applications and tools have been developed for artistic content creation; real-time interactive shape modeling has become increasingly important for a continuum of virtual and augmented reality environments (eXtended Reality (XR)). Shape modeling in XR opens new possibilities for intuitive design and shape modeling in an accessible way. Artificial Intelligence (AI) approaches generating shape information from text prompts are set to change how artists create and edit 3D models. There has been a substantial body of research on interactive 3D shape modeling. However, there is no recent extensive review of the existing techniques and what AI shape generation means for shape modeling in interactive XR environments. In this state-of-the-art paper, we fill this research gap in the literature by surveying free-form shape modeling work in XR, with a focus on sculpting and 3D sketching, the most intuitive forms of free-form shape modeling. We classify and discuss these works across five dimensions: contribution of the articles, domain setting, interaction tool, auto-completion, and collaborative designing. The paper concludes by discussing the disconnect between interactive 3D sculpting and sketching and how this will likely evolve with the prevalence of AI shape-generation tools in the future.