Why does my deformed mesh’s outer shape look awkward when none of the inner mesh vertices seem to be moved passed the outer vertices?

I’m trying to deform my mesh but the vertices cause these straight edges to occur where the inner mesh passes the outer mesh and create an awkward shape.

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Why does the orange outline of the mesh not match the vertex distribution? The red squares are the outer mesh vertices and the black are the inner vertices and none of the inner vertices seem to pass the outer vertices so why is it creating this shape? What possible approaches are there to fix this?