Metal oxide shell layers are promising candidates to improve the performance of metal nanoparticles (NPs) in various applications. However, despite a significant amount of experimental work on metal@metal oxide (M@MO) NPs, computational modeling is scarce, particularly on the sintering mechanism, which plays a crucial role in both the synthesis and performance of NPs. Here, we present atomic diffusion and sintering dynamics of M@MO NPs investigated using molecular dynamics based on the ReaxFF potentials. The coalescence process of the metal NPs with amorphous oxide shell is mainly facilitated by the relatively mobile surface atoms and grain-boundary-like diffusion, and thus, it is similar to reported mechanisms for crystalline nanoparticles. Intriguingly, atomic trajectory tracing reveals that surface diffusion is highly localized, contrary to the common understanding of freely moving high-mobility surface atoms. These atomic descriptions provide valuable insights for designing functional NPs with oxide layers and establishing more accurate accounts of the sintering mechanism.