Is it true that the Ripple Effect describes the fact that an object placed in water displaces some of that water?

Yes. most of it. But at the end all that energy ends up as 'thermal energy' of the water.

Before addressing the particular question let's first take a look at the 'big picture'

of the situation of an object falling into water.

Suppose an object originally rests at a given altitude over the water surface of a

swimming pool. Then it's allowed to free drop to the pool and gets to rest in the

bottom of the pool. (For simplicity's sake, object and pool's water are originally at

the same temperature and air drag on the object as it falls to the water's surface is

negligible).

What is going to happen at the end, is that the object's original potential energy,

measured from the bottom of the pool to the starting altitude, ends up in the pool's

water as thermal energy. Since we would most likely think of the experiment done

with an object not to big with respect to the pool like a Bowling ball, and a

dropping height measured from the pools floor of just a few meters, the energy that the water will gain at the end once the water has recovered its original

tranquility, will be too small to be sensed by a household temperature.

Now let's address the question 'in question', the description of the energy changes.

1.- When the object free falls from its resting point to the water's surface, the

kinetic energy developed comes from the potential energy lost at that point.

2.- The object has a 'collision' with the water's surface and suffers a sharp drop of

of its kinetic energy. A 'collision' of two objects makes the particles that conform

the objects (atoms, molecules) vibrate (part of this vibrations are transferred to the

surrounding medium, e.g., air, as sound). Vibration of the atoms or molecules of a

body are part of its 'thermal energy'. So, a rather small part of the kinetic energy

lost in the collision is transformed to thermal energy of the object and the water

involved in the collision. Most of the object's kinetic energy is invested in

displacing the water giving it motion (kinetic energy), local turbulence is developed

and the 'outward ripples' (waves) on the water surface are consequence of this

action.

3.- The object will continue making its way to the bottom losing its remaining

potential energy, giving motion to the water surrounding it, and although in very

small amount, some of it is invested in friction that ends as thermal energy in the

surroundings (the water).

4.- In conclusion, all the mechanical energy that the object gives to the water in

this hypothetical experiment in a pool ends up in the pool's water thermal energy.