Combine the first 3 ingredients in a widemouthed jar; cover and let stand 2 weeks in a cool, dark place, gently shaking jar occasionally.
Strain vinegar mixture through a cheesecloth-lined sieve into a glass measure or medium bowl, and discard shallots and crushed garlic cloves. Pour into a decorative bottle. Thread peeled garlic cloves onto a bamboo skewer; place in bottle. Seal with a cork or other airtight lid; store in a cool, dark place.