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So it’s not for use with a full-outer set up?
Someone like Tester would know the strictly correct answer to that, but in my experience yes that’s correct, insofar as an exposed cable on the chainstay is better protected with one of those on it. No issue with attempting to install it at the end of the housing though.
Hopefully my industrial draftsmanship makes it a bit more clear. I’m forgetting the terms, but if the “housing stop” circled in yellow were actually a housing stop, you would install as pictured. Since it’s not, you’d install at the end of the housing as pictured in green. Note that you may not be able to use the rubber shield if it gets in the way of the derailleur moving freely, but that extra noodle in the cap will protect the cable a bit more than a normal cap.
Facing the bike on the drive side.
Release gear cable from, usually rear, derailleur. Remove last piece of outer housing. Thread the rubber shield onto the cable in the direction of the shield in the top half of your image, ensuring you thread it onto the cable past the housing stop on the chainstay. Install sealed cap onto gear cable starting with the pointy end of the cap, as per your pic as well. Install housing, seat housing into cap, seat cap into chainstay stop, push rubber shield onto protruding part of sealed cap. Set up derailleur as normal.
Pro tip: twist the cable ends together, install shield and the cap turning them clockwise v gently onto the cable to prevent fraying and bending a wire.