Why does PS not release memory? What's going on? How to solve it?

There's two things here, and it's Photoshop on the one side, and the GPU on the other.

Photoshop itself is designed to not release memory until you close the application. The memory is reused and recycled as you open new files. This is what makes things like efficient batch processing possible - requesting memory from the operating system for every single file is much slower. So far everything is normal.

However, the GPU has complicated things in recent years. It uses its own memory, and it can use a lot, processing tasks called by Photoshop. The problem here is that on systems with an integrated GPU, this uses shared system memory. This memory does not go to scratch disk when running low, but to the system pagefile. The point is, there is a potential conflict.

Normally, the operating system should handle this and allocate memory as needed. But we've seen a few cases where GPU memory usage apparently runs unchecked, and keeps rising, eventually even eating away the system pagefile. This is when the whole machine chokes.

Yes, when this happens, it's not normal and qualifies as a bug. 

The good news is that a lot of users have come back and reported that a full reset of Photoshop preferences fixed it. The preferences contain the whole application configuration, including lots of hidden and system-dependent parameters. Preferences are vulnerable to corruption since they are rewritten on every application exit. That said, this particular problem seems to be a rather specific bug, since it seems to happen quite frequently (relatively speaking).

For a full preferences reset, go into your user account and move the whole Adobe Photoshop 2026 Settings folder to your desktop, so a new one can be rebuilt. Save out your custom actions, brushes etc first, they will be wiped.