1) (comment) windows Photos can't read RAW files. I had to download a plug-in for it to be able to do so. So I don't know if Photos was reading the embedded JPG or the raw (I'm assuming the RAW after I downloaded the plug-in). But to all your points above about how each RAW viewer's engine interprets the data...gonna be different.
By @windsurfer65
It’s a good question, and unfortunately (if my understanding is correct) we are still in “it depends” territory…
If you had to download a Windows plug-in that supports raw formats, then Windows Photos may be interpreting the raw file through the plug-in, and what the plug-in does is run it through a raw processing module that is either part of the plug-in or built into Windows. (I’m a Mac user and the analog there is that many raw formats can be interpreted through a raw module built into macOS, which various applications can call on to provide raw support.) But as we’ve now established, the visual results of the operating system’s raw module are likely to differ from what you’d see in various raw apps, and also from the next paragraph…
If the app doesn’t hook into Windows support for raw formats (doesn’t support the plug-in) and doesn’t have its own raw engine, then the only thing it can show is the preview embedded in the raw file, rendered by the camera.
2) (questions) There's a JPG image embeded in each RAW file? Is that true for all semi-pro/pro cameras or just my Nikon? If that's the case, is there a need to save both JPG and RAW files when taking an image? ANy way to easily extract the JPG from the RAW or don't bother? Storage is cheap and easy these days, so I'm all for easy.
By @windsurfer65
If a mass market camera (cheap or expensive) can save its sensor data to a camera raw file, it’s practically universal for them to embed a preview along with the raw data. It’s provided for those apps that can’t render the raw data themselves and don’t call on the OS raw module to help, like very basic or old apps.
JPEG is just the format the preview comes in, but the important thing is that a raw file with an embedded preview in JPEG format is not the same thing as setting the camera to shoot raw+JPEG. The first one saves one file to the camera card (raw file including a preview). The second one saves two files (raw file, and separate JPEG file).
For previews, the dimensions and quality depend on how the camera is set to create previews for raw files. (The embedded raw previews from my camera are not that great.) The defaults are often not full resolution or full quality, to save card space. For separately saved JPEG files, the dimensions and quality are controlled by the settings in the camera that apply to how it saves JPEG files (not previews).
Whether you can export a preview from a raw file is usually up to the software that it’s open in.
My take on it is that if you plan to edit the image away from what the camera recorded, there’s not much point in having the camera save raw+JPEG, because the JPEGs aren’t what you want the final images to look like. The people who either enable raw+JPEG, or just JPEG, are those who shoot to get near-perfect images out of camera and are also on tight deadlines, like a news or sports photographer. They can immediately upload camera JPEGs to editors for culling and publication without waiting to go through a separate export or preview extraction step.