Answered
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Pete Green's reply on this issue and a workaround:
Thanks for the report of the trouble setting Photoshop CC 2018 as the default application for opening PSD, We are aware of this one and working on a fix.
For now, the workaround is to have Photoshop open before you double-click on the PSD file, or drag the PSD onto the Photoshop icon on your Dock
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