So I’m following along with this using the same gun part model and I just can’t replicate your results using the subsurface and displace modifiers for the cage object. I get this utter mess instead.
It still has weird skewing on the screw details, but most notably, it doesn’t seem to be getting any of the model’s edges…

And I’m not sure what I’m doing wrong, since I’ve tried imitating your every click.
Thank you