Why does photoshop take so long work out that the File is too big to be a PSD

Often, when people who complain about file size, on examination it's often discovered they are creating a much larger file that they need to. For example, posters that have to be read from a distance do not need 300PPI resolution, a much lower one will suffice, with a corresponding huge reduction in file size.

One more thought is that if a file is large enough to need to be saved as a PSB, then it is problably going to be using a lot of scratch space, and that can slow things down depending on your scratch drive settings, and what sort of drive you use.  NVMe M.2 drives are crazy fast, and really affordable now, so if your motherboard supports them, they are an excellent choice for Photoshop scratch space.

I am a little out of touch with current hardware, and was actually shocked to see the specs on this WD Black.  To put that into perspective, it is not so long ago that a mechanical hard drive would give you a write speed of less than 100MB/s (I think they are about 150MB/s now).  And SSD might be 500MB/s and the WD SN850 below has a sequential write speed of 7000MB/s !!!  I was so doubful of those figures that I went looking for a review, but Tom's Hardware backed them up

As to why PSD file format can't be expanded beyond the 2GB limit, here are the reasons:

"PSD limits pixel dimensions to 30,000 x 30,000 and max size to 2GB.

PSD files are limited to 2 Gig because of the file format design and compatibility with other applications. That really cannot be changed. (PSD was created in 1989 before 64 bit hardware/os/apps and Terabyte drives.)

That's why the PSB format was created, to allow for much larger files (in pixel dimension and total file size).

300,000 x 300,000 and 4 exabytes, which modern hardware does not touch.

PSB files work up to around 4 Exabytes (4.2 billion GB), and we can't go beyond that without changing the OS file APIs to allow more then 64 bits for the file size and position."

Source: Chris Cox (who was the senior engineer on Ps for 20 years).

Do you have disk compression enabled in Preferences > File Handling? If so, disabling it speeds up the read and write process considerably. That includes reaching the point of getting the error message (which Photoshop will not show until it has attempted compression of the files). I disable it here as I value faster reads and writes much more than file size on disk.

On the second question, why does Photoshop not automatically save as PSB if it is too big to fit in the 2GB PSD filesize limit, you could raise a feature request*, but I suspect the answer may be that whilst many would use PSB, some may prefer to save as TIFF (which has a 4GB limit)

*You can raise /feature requests at the link below , where they will be seen by Adobe staff.
https://feedback.photoshop.com/photoshop_family

Dave