Ideal File Format and Workflow from Lightroom Classic and Photoshop

The main challenge is that Photoshop doesn’t edit raw files, they have to be converted from raw to color channels (such as RGB or CMYK) before Photoshop can edit them. If you edit in Lightroom Classic, it does that by converting raw to Photoshop format as it sends the image to Photoshop. If you edit in Camera Raw, then that is where the conversion happens when you click the Open button. As you probably already know, this is a challenge because the conversion is one way: Once it is done, all raw edits have been “baked into” the single layer of converted pixels, so it is not possible to “unbake” them back out if you wanted to round trip the image back to Lightroom Classic. So in the catalog, you end up with the original raw file and the rendered Photoshop file of the same photo; this is technically unavoidable.

That doesn‘t mean you can’t improve this process, but it isn’t easy. The main strategy is to plan ahead, using methods that maintain a connection so that if go back to Lightroom Classic and make some more edits, they can ripple through to the Photoshop version.

Basic approach, one way. This is only about planning ahead: Always remember to get as much done as you can in Lightroom Classic before sending the image to Photoshop, because you can’t go back to raw.

Intermediate approach, one way. When you want to send an image to Photoshop, in Lightroom Classic choose Photo > Edit In > Open as Smart Object in Photoshop. This will send the image to Photoshop as a document containing the raw file embedded as a Smart Object layer. The advantage of this is that if you want to make further edits at the raw stage, you can double-click the Smart Object layer in Photoshop, and the embedded raw file opens in Adobe Camera Raw, which has the same raw editing options as Lightroom Classic. When you’re done and you click OK in Camera Raw, the embedded raw file closes back into the Smart Object layer and the Photoshop documents shows your changes. Disadvantages: This doesn’t change the one-way trip to Photoshop, so the changes are not sent back to the original raw file in Lightroom Classic. Also, the raw file embedded in the Smart Object layer is a duplicate of the original, so it increases the file size of the Photoshop document, so if you do it with many documents it uses up storage space faster.

Advanced approach, round trip. This lets you send raw edits both ways between Lightroom Classic and Photoshop, so that you can keep both instances of the image consistent with each other. But is extremely challenging to do, and Adobe does not provide any instructions for it. To do it, you must first understand how raw metadata edits can be passed between Lightroom Classic and Camera Raw using XMP sidecar files. You must also understand how to created a linked (not embedded) raw Smart Object in Photoshop. By combining these techniques, you can make changes at either Lightroom Classic or its linked Camera Raw Smart Object instance in Photoshop, and the changes can be sent back to the instance in the other application. But in addition to requiring advanced knowledge, it’s not nearly automatic. You must get all the steps right on the way to making the Photoshop version with the Smart Object, and also, every time you make an edit on either side, you must do several manual steps to make sure edits make it back to the other side. In addition, if you want to bring the resulting Photoshop document into Lightroom Classic, then you have to keep track of which is which and make the right edits in the right file in the right order, so that you don’t end up with a tangled mess of edits. For some images I go to the trouble to do this (with great effort, and it’s glitchy), but it would be nice if Adobe made this more automatic. I didn’t go into detail about the steps, because they would be a lot longer than this already long paragraph!

At this point, you pick the above approach that matches your comfort level with raw Smart Objects in Photoshop and raw metadata transfers. Most people who want to do this go for the intermediate approach: Send it to Photoshop as a Smart Object to preserve raw edit flexibility, but live with the fact that it’s still a one way trip that loses its connection to the original raw file in Lightroom Classic.

One way to have a small amount of control in the roundtrip is use Smart Objects. These are editable again after the fact. The downside is larger files. You need to leave any hard pixel editing on it's own layer, and use Adjustment Layers where possible. Don't flatten the layers. @D Fosse suggests, it's a huge learning curve. 

Once you've saved in Photoshop, you need to use Edit Original to access the layered version of the file. If you use the option with Lightroom Adjustments, it flattens the file. 

You need to understand that the raw file and the Photoshop file are two separate and very different files.

The raw file sent to Photoshop produces a new file completely separate from the original raw. It has been demosaiced and encoded into an RGB color space, and this RGB file is an entirely different animal than the original single-channel linear raw file.

Also be aware that Lightroom does not support layers. Any Photoshop layers, as well as many other properties, will be ignored and lost in Lightroom. All you ever get out of Lightroom is a flat file.

What Lightroom works with is a flattened composite that Photoshop inserts in the file when saving. This flattened composite is all Lightroom knows about.

For this reason, Lightroom/Photoshop round tripping is something I would strongly advise against until you have a full understanding of the differences between these applications, and the practical implications thereof.

You cannot change this. It's the nature of the beast. When Lightroom sends a raw photo to Photoshop, the edits will be applied and the photo is opened as an RGB copy in Photoshop. It is not possible to change this.