Quotation על פסחים 52:3

This was only taught for the eulogy, but for burial it is forbidden. Because shatnez is not forbidden by the Torah, but rather wearing, and rising up [from the grave] is comparable to wearing, but the eulogy is only for an individual's honor, and is comparable to one who sells clothing [with shatnez to non-Jews] in the normal manner. However burial is comparable to wearing and because of this, wearing [shatnez] is forbidden for the one who says mitzvot aren't nullified [in the world to come].