Help - Cannot have multiple layers within a smart object - Forcing me to Flatten Image

Here is a script to automate the manual steps:

* Edit the embedded smart object layer

* Save As a copy to a temporary PSB file (or PSD)

* Close the edited smart object

* Replace the embedded smart object with the PSB

* Delete the temporary PSB

https://community.adobe.com/t5/photoshop-ecosystem-ideas/editing-and-saving-a-dynamic-object-with-more-layers/idc-p/15210208

/*
Create Embedded PSB from Smart Object Layer 1-2.jsx
Stephen Marsh
v1.0 - 14th March 2025: Initial release
v1.1 - 6th April 2025: Added a check to ensure that only Embedded Smart Objects are processed
v1.2 - 7th April 2025: Added a check to ensure that the Embedded Smart Object is supported by Photoshop for editing
https://community.adobe.com/t5/photoshop-ecosystem-ideas/editing-and-saving-a-dynamic-object-with-more-layers/idc-p/15210208
INFO: Run this script on an Embedded Smart Object to replace it as a PSB file (example, automatically convert an embedded JPEG to PSB so that it can accept layers).
Based on:
https://community.adobe.com/t5/photoshop-ecosystem-ideas/save-multilayer-png-jpg-smart-objects-as-psb-and-automatically-replace/idi-p/12504206
*/

#target photoshop;

try {

    // Check if a document is open
    if (app.documents.length === 0) {
        throw new Error("Error: A document must be open!");
    }

    // Check if the active layer is a Smart Object
    if (app.activeDocument.activeLayer.kind != LayerKind.SMARTOBJECT) {
        throw new Error("Error: The layer isn't a Smart Object!");
    }

    // Additional AM code checks for the Smart Object
    var ref = new ActionReference();
    ref.putEnumerated(charIDToTypeID("Lyr "), charIDToTypeID("Ordn"), charIDToTypeID("Trgt"));
    var layerDesc = executeActionGet(ref);
    ref.putProperty(charIDToTypeID("Prpr"), stringIDToTypeID("smartObject"));
    ref.putEnumerated(charIDToTypeID("Lyr "), charIDToTypeID("Ordn"), charIDToTypeID("Trgt"));
    var so = executeActionGet(ref).getObjectValue(stringIDToTypeID("smartObject"));
    var soMoreDesc = layerDesc.getObjectValue(stringIDToTypeID('smartObjectMore'));

    // Check if the Smart Object is a Generative AI layer
    if (soMoreDesc.hasKey(stringIDToTypeID('generativeDocInfo')) === true) {
        throw new Error("Error: A Generative Fill Smart Object isn't a supported layer type!");
    }

    // Check if the Smart Object is linked
    if (so.getBoolean(stringIDToTypeID("linked")) === true) {
        throw new Error("Error: A Linked Smart Object isn't a supported layer type!");
    }

    // Check if the embedded Smart Object is a supported for direct editing in Photoshop, and not a raw camera file or container file (e.g. PDF, EPS, AI)
    var theSOlayer = app.activeDocument.activeLayer;
    ref.putIdentifier(charIDToTypeID("Lyr "), theSOlayer.id);
    var desc = executeActionGet(ref);
    var smObj = desc.getObjectValue(stringIDToTypeID("smartObject"));
    var fileRef = smObj.getString(stringIDToTypeID("fileReference"));
    var fileExtension = fileRef.match(/\.([a-zA-Z0-9]+)$/i)[1];
    var validExtensions = /^(psd|psb|jpeg|jpg|tiff|tif|tga|png|webp|gif)$/i;

    if (validExtensions.test(fileExtension)) {

        // Edit the original embedded SO
        app.runMenuItem(stringIDToTypeID('placedLayerEditContents'));

        // Create a temp folder with a name based on datetime
        function pad(number, length) {
            var str = '' + number;
            while (str.length < length) {
                str = '0' + str;
            }
            return str;
        }

        function getFormattedDateTime() {
            var now = new Date();
            var day = pad(now.getDate(), 2);
            var month = pad(now.getMonth() + 1, 2); // Months are zero-based
            var year = now.getFullYear();
            var hours = pad(now.getHours(), 2);
            var minutes = pad(now.getMinutes(), 2);
            var seconds = pad(now.getSeconds(), 2);
            var milliseconds = pad(now.getMilliseconds(), 3);
            return day + month + year + hours + minutes + seconds + milliseconds;
        }

        var timestamp = getFormattedDateTime();
        var theTempDir = new Folder("~/Desktop/_theTempDir_" + timestamp);
        if (theTempDir.exists) {
            throw new Error("Error: Script cancelled as the temporary desktop folder already exists!");
        }

        theTempDir.create();

        // Save the open edited embedded image to a temp PSB file
        var thePSB = theTempDir + "/" + app.activeDocument.name.replace(/\.[^\.]+$/, '') + ".psb";
        function s2t(s) {
            return app.stringIDToTypeID(s);
        }
        var descriptor = new ActionDescriptor();
        var descriptor2 = new ActionDescriptor();
        descriptor2.putBoolean(s2t("maximizeCompatibility"), true);
        descriptor.putObject(s2t("as"), s2t("largeDocumentFormat"), descriptor2);
        descriptor.putPath(s2t("in"), new File(thePSB));
        descriptor.putBoolean(s2t("lowerCase"), true);
        descriptor.putEnumerated(s2t("saveStage"), s2t("saveStageType"), s2t("saveSucceeded"));
        executeAction(s2t("save"), descriptor, DialogModes.NO);
        app.activeDocument.close(SaveOptions.DONOTSAVECHANGES);

        // Replace the original embedded file with the temp PSB file
        descriptor = new ActionDescriptor();
        descriptor.putPath(s2t("null"), new File(thePSB));
        executeAction(s2t("placedLayerReplaceContents"), descriptor, DialogModes.NO);

        // Remove the temp PSB before the temp folder can be removed
        thePSB = new File(thePSB);
        thePSB.remove();

        // Remove the empty temp folder
        theTempDir.remove();

        // End of script notification
        // alert("The embedded Smart Object has been replaced with a PSB file!");
        app.beep();

    } else {
        throw new Error("Error: The embedded Smart Object isn't a supported file type for automated PSB replacement!");
    }

} catch (e) {
    alert(e.message);
}

1. Copy the code text to the clipboard
2. Open a new blank file in a plain-text editor (not in a word processor)
3. Paste the code in
4. Save as a plain text format file – .txt
5. Rename the saved file extension from .txt to .jsx
6. Install or browse to the .jsx file to run (see below)

https://prepression.blogspot.com/2017/11/downloading-and-installing-adobe-scripts.html