When I place an image onto my canvas by drag & drop or copy & paste, then convert the image layer into a smart object I have no problems opening that smart object and adding adjustments layers. When I place an image onto my canvas by choosing place embedded, which then automatically converts the image into a smart object layer and when I try to edit the smart object I recieve an error message;
Can't save this document back to its original file format. Flatten layers and discard extra data as necessary then choose File > Save again.
Does this happen for a reason because I like the fact that if you place an image onto your canvas convert the layer to a smart object then duplicate and transform that if I change the image Ps not only replaces all the duplicated smart objects but also remembers the transform properties.
So when you place a jpg file using place embedded photoshop converts it into a smart object but keeps it as a jpg therefore when one tries to open that smart object and add an adustment layer you can't save it. If I paste a jpg image by copy or paste or drag & drop then I convert the layer myself into a smart object then photoshop converts that jpg into a psb to allow for adjustment layers but not if I use File / Place Embeded which converts to a smart object, that smart object has to be edited destructivly.