"When the smaller is hidden in the larger, there remains someplace into which it can escape. But if you hide the world in the world, so there is nowhere for anything to escape to, this is an arrangement, the vastest arrangement, which can sustain all things. . . . This human form is merely a circumstance which has been met with, just something stumbled into, but those who have become humans delight in it nonetheless. Now the human form in its time undergoes ten thousand transformations, never stopping for an instant—so the joys it brings must be beyond calculation! Hence, the sage uses it to roam in that from which nothing escapes, where all things are maintained. Early death, old age, the beginning, the end — this allows him to see each of them as good." (Zhuangzi, 6:28; Ziporyn)
I share this extensive quote because I believe it provides a relatively succinct summation of Zhuangzi's vision.
"That from which nothing escapes" is Dao understood as both the source and actuality of endless transformation. An important aspect of the passage's larger context is a discussion of death, which is, for the human, perhaps the greatest transformation of all. Thus, this psychological release into the vastness is seen as an antidote to apprehensions about death.
"The smaller" which is hidden in the larger is the fixed personal identity which one typically fears losing. There is no relief, Zhuangzi tells us, in attempting to hide this 'entity' in the vastness; they are mutually incompatible. The vastness is transformation; how then could it maintain our precious sense of fixed-identity?
Release into the vastness is essentially the equivalent of letting go one's grasp on this fixed-identity and the permanence and continuity which it requires and for which it hungers. The cost of release from apprehensions regarding death is a kind of psychological death in life. Without fixed identity, one is the equivalent of all the Totality; what then is there to lose? It is very much like the proverbial bubble on the surface of the sea; realizing it has no true nature apart from the sea from which it arises, it enjoys its brief moment in the sun, and happily accepts its end and return.
It is noteworthy that, quite to the contrary of a sense of morbidity and resignation, this release is an occasion for enjoying to the fullest the joys that life offers. Yet none of these are clung to; they are all understood as being as fleeting as life itself.
From the perspective of the vastness where the sage roams, even the still-born does not die too soon. Nothing can be lost when all things are hidden in All.
You can check out Scott's writings on Zhuangzi here.