This is how I would do it…
MUCH BETTER AS PART OF AN INTEGRATED SYSTEM
While I am not against this idea by any means with modern anti-ship missile guidance systems this technique would be far more effective if combined with anti tracking (sonar and radar) countermeasures which made it seem to sonar and radar as if the ship were either farther ahead of or farther behind it’s actual position than it truly was.
That is to say that few hostiles, if anyone (aside perhaps from Somali pirates), sights or fixes a ship’s position (or a tank’s position for that matter) relying solely upon visual evidence.
Therefore to make the system far more effective as a defense you would need to tie the moving visual pattern to anti or counter sonar and radar pulses or to an omni-directional pulse which either scattered or confused incoming tracking systems so as to make the ship appear displaced from it’s actual physical position. Because most tracking systems are now sound and echo-reflection based rather than visual in nature. However if you could developed integrated confused/confusing visual systems, counter-sonar and radar systems, and stealth design techniques then I could see this being part of a very effective integrated ship (and other machine) defense protocol.
But alone I don’t see the actual advantage, other than as a psychological one. I think though that such an integrated system would, of course, be far, far more effective (especially a moving location/position displacement system) for our submarine fleet unless you had a flotilla of small ships that could overlap their integrated systems and in some way combine their power and effectiveness.
Of course the ultimate defense would be to combine a visual and radar/sonar Displacement System with Adaptive Camouflage and a Stealthy Design or Build coupled with an effective and efficient attack suppression system such as an Aegis Platform. That would make a ship appear to be displaced from it’s real position while being extremely hard to see and track and capable of intercepting attacks prior to a successful enemy strike.
I can also see such a system working well with a squadron of aircraft, or a group of tanks or armored fighting vehicles. If they could combine or overlap their displacement fields then they could not only confuse tracking systems but give their defensive response systems (such as the Aegis with ships) more time to effectively counter missile and other attacks.
Of course it would not be long before effective computer algorithms and compensational computer models were designed to help overcome such displacement systems.
But if done in an efficient and powerful enough way then integrated positional displacement systems would still be some defense and maybe just enough of an advantage to warrant the expense and employment.