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In PS ACR 12.2.1 there was an option to choose where XMP files were stored. One option was to store them in a PS database. That functionality was removed in later versions. Please RESTORE that functionality. I do NOT want/need/horrible inconvenience to manage XMP files along with my RAW files. I often move folders around, even from drive to drive. If I have to manage XMP files with the RAW files, it creates major workflow hassles. I'm not sure why the option was removed. It makes no sense to me.
Using the MAC OS Big Sur 11.6. I don't think my OS has anything to do with this issue. It's an internal PS issue.
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Yes, it's a Photoshop issue and I give you zero chance that Adobe will change this again. You'll have to learn how to live with it, or convert your raw files to DNG. DNG files do not have XMP sidecar files, because the edits are stored in the metadata header of the file itself.