Why does this high resolution photo look pixelated when placing or copying and pasting on to a layer

[777_777]

I've tried exporting it as a smaller file, but that did not work. I just want to understand why it happens. Is there a similar fix to comand+ E in adobe illustrator? 

[Stephen Marsh]

It's a linked smart object.

What are the pixel dimensions of the linked smart object and what resolution PPI value?

What are the pixel dimensions of the Photoshop layered file and what resolution PPI value?

Can you share a screenshot of the Properties panel with the linked smart object layer active?

In Preferences/Settings - General: What are your Image Interpolation (resampling) settings?

[Bojan Živković]

Could you post a screenshot of the entire window so we can see the magnification level? Judge solely at 100% view.