The quote from the Tao of Sudden Enlightenment is a text written by Dazhu Huihai who was a disciple of Mazu and so a contemporary of Baizhang, master of Huangbo, in the same Hongzhou school. It's nothing to do with Taoism. That's why I've chosen that as a good source of explaining the teaching of no mind.
As for your explanation with statue, you successfully made up several levels of reification. Fortunately, madhyamaka uses only two truths, even if Jizang (Chinese reformer of madhyamaka) created a 4×2 truths system. One is stuck in ignorance as long as there is grasping a concept. Without abiding in any idea, there is freedom. Even if you create a hundred levels of larger and smaller areas of conceptual attachment, it's still mental proliferation. Without proliferation there is nirvana (MMK 18.5), it is the buddha (MMK 22.15). The ending of objectification, proliferation is within the scope of arhats too (DN 21, MN 18, SN 22.53).
By the way. prasanga is just a method, and those who apply that to teach people are the prasangika. Other forms of teaching, like mind only and even abhidharma, are used to bring people to liberation, freedom from attachment to ideas, and not just an idea of liberation.
"While teachers of the middle way, mind only, transcendent wisdom, mantra, and other schools may have their own assertions, the fulfillment of those intentions is the same. There is not a single thing that is not contained within mind."
(Gampopa to Düsum Khyenpa, in "The First Karmapa", KTD Pub, p254)
“If you recognize the world of appearance and existence as the mind, realize the mind itself as empty, and have no grasping at the superiority of your realizations — this is the ultimate view."
(Chegom Dzongpa, in "The Book of Kadam", Wisdom Pub, p609)