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"But in case you uncheck this, why is a video file treated as a raw file?"
Some cameras create JPEG "sidecars" to hold video metadata (similar to how a .xmp sidecar holds metadata for a raw). Some of these cameras used the .jpg extension for these sidecars, and some used .thm, even though the file is a JPEG (e.g. Sonys). I'm not sure why the cameras do this, since the Quicktime and MP4 standards fully support metadata, including XMP metadata.
Regardless, when Treat JPEG Files Next To Raw Files As Separate Photos is unchecked, LR treats X.jpg and X.thm as sidecars for X.mov and X.mp4 (and perhaps other video formats as well) and reads metadata for the video from them (e.g. capture date). You can see that in the Metadata panel:
The name of the option is indeed confusing. It would be more accurate to call it:
"Treat JPEG files next to raw files as separate photos, and treat JPEG and THM files next to video files as sidecars."
I think the Adobe product manager/developer responsible for this opted for short over accurate.
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