16 Bit Greyscale

True, the color picker only gives you 8 bit initial values. That's about the smallest difference your eyes can separate, so 16 bit values here wouldn't be of any practical use. 

But from that point, everything operates in 16 bit mode - soft brushes, adjustments, gradients, masks, etc. And that's where 16 bit depth matters. Every pixel value can be shifted in 32 768 increments instead of 256.

This is where someone regularly comes forward to point out that Photoshop 16 bit is really 15 bits + 1, so it's not 65 536, but 32 768, as if that somehow breaks your files. This was done deliberately, to avoid / ensure a fixed middle value (can't recall which).

The only exception is selections. Selections are legacy code and always 8 bits. It's a common misconception that masks are also 8 bit, but that's not correct. Masks are full document bit depth.

@D Fosse