A man in a gray shirt and blue shorts is standing outside of an old fashioned ice cream shop named Sara's Old Fashioned Ice Cream, holding his bike up, with a wood like table, chairs, benches in front of him.
A man is holding a bike up
Holding his bike up is a rephrasing of is holding a bike up.
"A man holding his bike up" means basically the same as "a man is holding a bike up."
Man in a gray shirt is a type of man, and holding his bike up is a paraphrase of holding a bike up.