Proximity wrap uses the base mesh as the reference: the mesh without any deformers attached, and without its local transforms. There are reasons for this, but it makes it a bit trickier to use than old wrap deformers at first.
Usually if nothing seems to be happening, it means there's a mismatch with the mesh proximityWrap is using as a base compared to what you think it is.
- Make sure that your skinned mesh doesn't have any transforms on the mesh itself. Translation and rotation should be zero, and scale should be 1. It's usually good to freeze transforms on meshes before initially binding a skinCluster.
For example, sometimes imported meshes have scaling on them, like a 0.01 scale on the mesh because there was a meter to cm conversion on it. That complicates proximityWrap, since it's using the unscaled mesh as a base.
- When you create the proximity wrap, disable skinCluster by setting envelope to 0. If your joints are all in bind pose this shouldn't change anything. This will show you the initial mesh that proximityWrap is using, which your wrapped mesh will be affected by. If your mesh changes in unexpected ways then it should explain the problem, for example if you've scaled the joints to resize the mesh. Remember to set envelope back to 1 when you're done to turn skinning back on.
There are some other less common things that could be related (like having broad mesh changes stored on a tweak node), but those are some of the common ones.
