What is meant "And Allah encompasses the disbelievers"?

Imām Ibn al-Jawzī (d. 597 AH / 1201 CE) summarized the scholars' opinions in his book "Zād al-Masīr" as follows:

1. None of them shall escape Allāh, for He will gather them all on the Day of Judgment. This is similar to His saying: "He has encompassed all things in knowledge" (65:12). [Mujāhid]
2. It means to destroy them, as in the verse: "And his fruit (of his garden) was encompassed" (18:42).
3. Nothing they do is hidden from Him.