I think players make a grave mistake thinking that memorizing some chart will make them a better player ... it doesn't. It might help someone with a good ear to understand WHY what they're playing sounds good (or doesn't), and be able to describe it in musical terms (maybe), but no one PLAYS modes. And no, that diagram does not represent "almost everything you need to understand about music theory". Not by long shot. Again it could be helpful, but I'd rather give a beginner some EAR training, learn to recognize intervals, learn common chord progressions, learn to create simple bass lines over those progressions, learn to read notation ... and THEN maybe learn why all that is musical.
Not sure at all how this is related to the CAGED system, which really is the key to learning to play movable chord patterns, and isn't, as said above, directly applicable to bass