Hierarchical micro-structured catalyst has been proved to be crucial for modular, compact reactor design towards sustainable catalytic processes, including catalytic emission control. However, turning it to reality is hindered by controllability and scalability in high-efficient, cost-effective preparation, particularly when combined with state-of-the-art encapsulated catalysts. Herein, in-situ hydrothermal coating method is developed to achieve tunable incorporation of Pd@S-1 catalyst into micro-structured confined space, and the trade-off between catalyst loading and confined micro-structures’ availability towards the best performance is revealed, e.g. 10 ∼ 50 °C lower T50 with balanced control. Moreover, systematic experiments and CFD simulations prove that (1) flow-through flow pattern, rather than flow-over, in confined space enables better catalyst utilization and performance (>10 °C lower T50), thus optimal micro-structure design is proposed; (3) a loosely bundled scale-up method is the best. This study provides deep insights into understanding and utilizing hierarchical structured catalysts, particularly with confined micro-structures.