Most wheeled luggage has a set of hollow metal bars inside where the retractable towing handle on the top retracts into. They're pretty sturdy, so you loop the pacsafe wire around one or both before locking it and then lock the bag.
Only way to get it out is probably to destroy the luggage or break into the pacsafe itself.
The idea behind it is that the pacsafe itself might be worth preparing for if it's just out in the open tied to something secure. If a thief has no clue it's there and thinks they just have to break the padlock on the luggage itself then it's another layer of defence they're not expecting.
But importantly, it's not really a lot of work from my pov. Again it won't deter a premeditated determined thief with the right tools, but very little will.
I generally have a nice hard case wheeled suitcase for my luggage, I bike cable that to something immovable and inside I tether the pacsafe to one of the rails where the suitcase handle runs.
It's enough peace of mind for me. 99% of casual theft isn't going to try and open the bag, if they do then they have to deal with the pacsafe.
If someone is absolutely determined then they'll get through all that of course, but as you say, you will know it's happened and the police are going to get involved. The number of thieves realistically willing to do that ain't going to be that high because the payoff of what might be in there is unknown.
I travelled continuously for a year at one point and this strat served me well enough.