Yes, ALPACA is for transferring landmarks, and the deformation is calculated using reduced point clouds since it is very fast and offers enough accuracy. We will clarify the documentation to explain that visualization is only an approximation and limited to the points selected.
We had been talking about having a separate mesh registration framework build on point clouds, but not sure what the timing of it would be. If @agporto and you are interested in workign together, we can schedule a meeting.