P: Photoshop hangs when using smart objects

The test I tried used a layer with transparency. Then flattened as described. Both fine.

While fiddling around with PS2022 to see if it makes any difference (it doesn't), I stumbled ovet this, which might explain why it was fast on your computer. 

When I drag a flattened image into my test file, it is instantly dropped. But when I drag a transparent layer (as you can see in my screencast) it takes a long time to drop. So you probably dragged a flat layer into my test file. Please try it with a transparent layer. Just create a new file with a transparent background. Scribble something on it, and drag that layer over.

Well. There's something wrong with my installation/settings then. I've created a screencast where you can see how it looks on my PC. While I'm moving the mouse around, Photoshop is not responsive.

Screencast 

I've created a test file where you can check the issue. Open it, and then drag some layer from another file into its canvas. On my PC (64GB RAM, GTX 3060) it takes about 10 seconds until the layer is placed and Photoshop is responsive again.

By @Andreas Resch

No issue for me to do this. The layer I dragged into your test doc was a differing bit depth and color space, Photoshop provided information about both, so I allowed it to convert both to 8-bits and sRGB  (from ProPhoto); Photoshop did both conversions and placed the new layer into your test doc. Then I converted my multiple layered document to sRGB and 8-bit per color, did another drag and drop, it instantly applied it into your test document. 

Latest release of Photoshop on a MacBook running Apple M1 processor, latest version of macOS. 

I've created a test file where you can check the issue. Open it, and then drag some layer from another file into its canvas. On my PC (64GB RAM, GTX 3060) it takes about 10 seconds until the layer is placed and Photoshop is responsive again. Interestingly enough, when I do this a second time (without closing the file) it happens much faster. But then again, as soon as I close the file, open it again and follow the same procedure, it's slow again.

Sample File 

Nevermind. Photoshop Beta has the same issue. I will uninstall it again.

Will the files being saved in Photoshop Beta be backwards compatible to CC2023?

Have you tried the Photoshop Beta available on Creative Cloud? You can keep both versions installed so you won't lose your 24.0.1 build. 

I've downgraded to V14.5 but the problem still is in there. I won't dare to go any lower than 14.5. I've already got a warning with this version. So this is either a bug or a lack of performance optimization. 

Yeah, I could do that. But then I'm not in sync with Lightroom any more and this may lead to other problems. I might have to downgrade Lightroom as well. But who knows what will happen to images that I've already edited with the newest version. And then there's Bridge, who's not too hapy with downgrading as well - and I already use the previous version of Bridge because the new one is pretty bad.

If any developers read this - please fix the sloppy performance of the Camera Raw filter. It's very tiring once you have a few of those layers in a file.