Script for merging each main groups/artboard into separate layers, with auto selection.

Instead of the original script, here are two alternative scripts that you may wish to try, which don't require any layers to be selected. I have added the extra code to rasterize the SO layer:

/* convert all top level layers and layer sets to smart objects AM CODE.jsx

by jazz-y
Smart Objects in separate layers
https://community.adobe.com/t5/photoshop/smart-objects-in-separate-layers/td-p/11137197
*/

#target photoshop

s2t = stringIDToTypeID;
t2s = typeIDToStringID;

(r = new ActionReference()).putProperty(s2t('property'), p = s2t('hasBackgroundLayer'));
r.putEnumerated(s2t('document'), s2t('ordinal'), s2t('targetEnum'))
var indexFrom = executeActionGet(r).getBoolean(p) ? 0 : 1;

(r = new ActionReference()).putProperty(s2t('property'), p = s2t('numberOfLayers'));
r.putEnumerated(s2t('document'), s2t('ordinal'), s2t('targetEnum'))
var indexTo = executeActionGet(r).getInteger(p);

var layers = {}
parseLayerSets(indexFrom, indexTo, layers)

for (o in layers) {
    (r = new ActionReference()).putProperty(s2t('property'), p = s2t('layerKind'));
    r.putIdentifier(s2t("layer"), layers[o].id);
    var kind = executeActionGet(r).getInteger(p)
    if (kind != 2 && kind != 5) {
        (r = new ActionReference()).putIdentifier(s2t("layer"), layers[o].id);
        (d = new ActionDescriptor()).putReference(s2t("null"), r);
        executeAction(s2t("select"), d, DialogModes.NO)
        try {
            executeAction(s2t("newPlacedLayer"), undefined, DialogModes.NO);
            activeDocument.activeLayer.rasterize(RasterizeType.ENTIRELAYER);
        } catch (e) {
            alert(e)
        }
    }
}

function parseLayerSets(from, to, parentObj) {
    for (var i = from; i <= to; i++) {
        (r = new ActionReference()).putProperty(s2t('property'), p = s2t('layerSection'));
        r.putIndex(s2t("layer"), i)
        var section = t2s(executeActionGet(r).getEnumerationValue(p))

        if (section == 'layerSectionEnd') {
            i = parseLayerSets(i + 1, to, parentObj[i] = {})
            continue;
        }

        var properties = {};
        (r = new ActionReference()).putProperty(s2t('property'), p = s2t('layerID'));
        r.putIndex(s2t("layer"), i);
        properties.id = executeActionGet(r).getInteger(p);

        if (section == 'layerSectionStart') {
            for (o in properties) {
                parentObj[o] = properties[o]
            }
            return i;
        } else {
            parentObj[i] = properties
        }
    }
}

Or perhaps this one:

/* convert all top level layers and layer sets to smart objects.jsx

Smart Objects in separate layers
https://community.adobe.com/t5/photoshop/smart-objects-in-separate-layers/td-p/11137197
*/

function main() {

    if (!documents.length) {
        alert('There are no documents open!');
    } else {
        processAllLayersAndSets(app.activeDocument);
    }

    function processAllLayersAndSets(obj) {

        // Process all layers and layer sets
        // Change the following 2 entries of "obj.layers" to "obj.artLayers" to exclude layer sets
        for (var al = obj.layers.length - 1; 0 <= al; al--) {
            app.activeDocument.activeLayer = obj.layers[al];

            newPlacedLayer();
            activeDocument.activeLayer.rasterize(RasterizeType.ENTIRELAYER);

        }

        // Process Layer Set Layers 
        for (var ls = obj.layerSets.length - 1; 0 <= ls; ls--) {
            processAllLayersAndSets(obj.layerSets[ls]);

            newPlacedLayer();
            activeDocument.activeLayer.rasterize(RasterizeType.ENTIRELAYER);

        }
    }

    // Convert to smart object (Cleaned AM code)
    function newPlacedLayer() {
        var s2t = function (s) {
            return app.stringIDToTypeID(s);
        };
        executeAction(s2t("newPlacedLayer"), undefined, DialogModes.NO);
    }
}

activeDocument.suspendHistory('Smart Objects from Layers & Sets', 'main()');