A couple options exist here. 

1. Put the field editor on same model.  Go through the lookup and add the contact data to the model.  In the lookup field’s search properties add those fields to what is queried when the lookup is selected.  (You do not need to include the fields in the search table,  just make them queried).   This will populate the contact detail fields when the lookup is selected.   Downside:  Fields will not be editable. 

2. Add a condition to your contact model on the id field that is filterable default off. 
Add a model action to the Action that fires when the contact field is updated. 
That action should update the condition you created on the contact model with the {{ContactId}} selected in the contact.  Then it should requery the model.

 (This is where you went wrong above.  It doesn’t look like you were updating the condition when you selected a new contact in the lookup.  This will not happen automatically) 

This will refresh the contact model and when values are detected,  the Field editor will render.   These results will be editable. 

Never knew you could run actions based on a field being updated - that’s magical…

@rob thank you , this worked amazing 

@Joe - It’s been way too long in coming, but we finally have an article on Model Actions that talks about all the different possibilities and gives some example applications, published yesterday.