The b&w photo that was created in camera-raw had color space grey-gamma 1.8.
When I changed it to 2.2 the jpg looked I intended it to be - as the dng.
Where was I suppose to set it to grey-gamma 2.2?
When should I use 1.8?
Short answer is you shouldn't. Gamma 2.2 is much safer, because even without proper color management, it matches a monitor's native behavior well enough so that it should look roughly right in most circumstances.
But my advice is still to not use grayscale, because support in other applications is so uncertain. Inside Photoshop you'll be fine as long as the profile is embedded. But there is an inherent problem even there, because the default working gray is Dot Gain 20%, which is obsolete and doesn't match any current output destination. So without an embedded profile, it goes wrong right off.
Use grayscale with care and attention. One valid use case is for black-plate-only offset print, but then you will use the K component in the appropriate CMYK profile.
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