Was just watching the VSL finals, Oath player tries to Oath when his opponent has Containment Priest and a Cage in play. His creature ends up getting exiled. Can someone explain this to me? I didn't think the exile clause would occur because the creature wouldn't ETB because of the Cage. Does the Priest not even care about the Cage's effect on the creature?
Consensus seems to be this is a bug.
The Dredge/Spirit of the Labyrinth interaction is you can Dredge as many times as you like so long as you never "draw" a card, but once you draw a card you don't get the option to Dredge.
The implication is that "can't" effects beat out replacement effects. In the case of Cage/Priest, that would mean that the creature never tries to come into play and therefore does not get exiled.
The algorithm for working out these kinds of interactions is:
Work out which parts of the effect are allowed by the rules (as modified by continuous effects that modify the rules of the game). Compute the effect which "does as much as possible" of the original effect without violating any of these "can't" rules.
The effect now takes place. All or parts of the effect might be modified by replacement effects (which again will only do "as much as possible" if they instruct you to do something impossible).
Gravedigger's Cage created a continuous effect modifying the rules of the game so that creatures cannot enter from the library (not a replacement effect). Because of this, Oath doesn't even try to put a creature onto the battlefield -- there is thus no event for the Priest to even try to replace.