Arguably, it is not wrong. "a continuous line that defines the outline of a shape." is (if you put aside the fact that they are curves, not lines), a predicate that applies to each contour line. It's the same sort of grammar as "Earthquakes are the result of tension between two plates being released". If you want to get nitpicky, the set of all earthquakes involves more than just two plates, and so this is true only if it's interpreted as "Each earthquake is the result of tension between two plates being released". Or what about "Everyone here has a car"? Does that means "there is a car that is collectively owned by everyone here"? Is it grammatically incorrect to say "All the people here are a doctor"? Just how a predicate is distributed across a plural subject is ambiguous, and depends on context. Unless you want to get really rigorous, such as "Given any contour line, that contour line is a continuous line that defines the outline of a shape", there's no easy way to eliminate ambiguity. For instance:
Contour lines are continuous lines that define the outline of a shape. Could be interpreted as "There is one shape that the totality of all contour lines together define the outline of", rather than "For each contour line, there is a shape that that contour line defines the outline of.
Contour lines are continuous lines that define the outlines of shapes. Could still be interpreted as talking about a property that all contour lines collectively have, or could be interpreted as saying that it's possible for one contour line to define multiple shapes.
A contour line is a continuous line that defines the outlines of a shape. Could be interpreted as "There exists a contour line that defines the outlines of a shape", rather than saying that all contour lines define the outlines of a shape.