I've found an issue with the more recent versions of Photoshop (likely since the update to the smart filter features they added). Essentially, when you liquify a Smart Object (it has a transparent background, I'm not sure if that matters) and then make any changes inside that smart object, your Liquify looks like it's still active in the Layer palette, but all the liquifying you did is gone. It doesn't matter what you do to the objects within the smart object, as soon as you save the smart object and go back to the original document where the liquifying filter was applied, all the liquifying is gone. This is super frustrating to say the least as it's hard to work in a non destructive way without smart objects. I'm using Photoshop for Windows 10 home edition. I swear this worked in even the first version of Photoshop 2021 when it came out, but something changed.