That method will not allow you to scroll vertically, it is more or less a distorted cylinder, as in the middle sphere of the 3 example spheres above.

If I understand correctly what you want to do, you will have to make the world look like a sphere but behave like a torus.

On a torus you can keep heading "north" forever, looping from top to bottom on the square texture bitmap, whereas on a real sphere it doesnt work that way at all, however you map it, at some point you'd have to change your orientation on the 2d image to loop around the 3d projection.

Assuming you'll want it to loop in both directions, and you're OK with it not behaving like a sphere, what you want is better described as a grid on a flat plane viewed top down through an extreme fisheye lens.

You can still do it with a displacement map I guess, it is just that your map texture should be at least double the height and double the width of the visible area (because it can loop either way) meaning you'll only see 1/4 of it at any time even though it will appear like you are seeing 1/2.