How can my Mac still be falling asleep with Caffeinate?
Missing some information, but I'll make some guesses: 


caffeinate -s only applies when system is running on ac power


So maybe assume this is an iMac? (from your reference to a "DP-based monitor") 


caffeinate -d might be worth trying, but it's hard to say if an iMac can keep a non-Apple monitor from sleeping. 


The fact that you're seeing activity lights on your external drive may or may not mean something... I have an external drive that blinks when it goes into idle mode :) 


You might also try this: Start an app on your Mac, get its PID (e.g. 123) from Activity Monitor, and then run caffeinate - w 123 


A couple of other things to try that would verify the true state of your Mac: initiate a VNC connection to your Mac from another Mac or PC, or alternatively enable the remote login service for your Mac, and make an SSH connection to it. This would allow you to verify whether your Mac is really sleeping, or whether something else is going on. Simply pinging your Mac might also give some indications.