Duplicate folder and smartobjects to edit

For those using a "relatively newish" version of Photoshop, there may be a very simple action based approach, with only a few steps...

Select the layer group/set that contains SO layer that you wish to "disassociate" from other SO layers:

1) Layer > Smart Objects > Convert to Smart Object

2) Layer > Smart Objects > Convert to Layers (I'm not sure which version/build introduced this?)

Optionally insert a conditional to only run the action on a layer group

Or as a script (4th September 2021 - original script updated to include conditional checking):

#target photoshop

// (app.activeDocument.activeLayer.typename === "LayerSet")

if (app.activeDocument.activeLayer.typename === "LayerSet" && app.activeDocument.activeLayer.layers.length > 0) {

    var idnewPlacedLayer = stringIDToTypeID("newPlacedLayer");
    executeAction(idnewPlacedLayer, undefined, DialogModes.NO);

    var idplacedLayerConvertToLayers = stringIDToTypeID("placedLayerConvertToLayers");
    executeAction(idplacedLayerConvertToLayers, undefined, DialogModes.NO);

} else {
    alert("This layer type is NOT a layer set/group")
}

The beauty of this is that the layer group stays in the same position in the layer stack, it appears that simply creating a SO and then "decomposing" the SO back to a layer group achieves the desired end result of making the smart objects independent.