Currently, accurate displacement using Catmull-Clark subdivision is not possible using Arnold for Max.
I have already contacted Solid Angle support about the issue and to sum up the response, 3ds Max has to export quads NOT triangles in order for displacement to work.
It's clear that Solid Angle have no plans to fix it from their end so it is up to the Max team to fix this production-killing bug.
I personally have very little motivation to continue using Arnold for Max if there is no development from Autodesk on core feature such as displacement.
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