Exactly… The diffuser now sits at the bottom of the pot with the modified grate and you use the steam plate recess for your 3rd cooking grate allowing for extra cooking space. . So now you use the pots lid to raise it a few inches out of the lower part of the weber allowing more charcoal room. Best of both worlds.
Could I set the terra cotta pot on the steamer insert if I need to use the lower rack?
Yes you can do that, and then set the rack right on the terra-cotta. Its pretty simple to modify a cooking grate to slip past the steamer tray insert spot if needed to get to the bottom. I really comes down to how much space do you need. I have never added a second set of grate bolts between the top grate spot and the steamer tray location. Right now if I set a grate at the steamer insert location, then put a 8-9 pound butt on the lower grate, then put in the upper grate, that grate will usually be touching the meat below. I have my top grate set 4" below the top of the pot. I have considered adding another grate location half way between the top grate and the steamer insert location. But I haven't simply because I usually am not cooking that much food, especially food that is only 2-3 inches thick.
I'm sure that you could modify the steamer insert to slip past. At times you will not want anything at the very bottom of the pot. That will allow more room for extra charcoal if needed for longer cooks.
