Why is New Smart Object via Copy greyed out for linked Smart Objects?

A new related script here:

https://community.adobe.com/t5/photoshop-ecosystem-discussions/please-fix-how-relink-to-file-and-replace-content-work/td-p/14846535

This script links to an existing file, rather than creating a new copy of the current linked file.

This 1.1 script version will check if the new copy file exists and cancel the script without overwriting the file:

/*
New Linked Smart Object via Copy.jsx
v1.1 - 27th January 2024, Stephen Marsh
https://community.adobe.com/t5/photoshop-ecosystem-discussions/why-is-new-smart-object-via-copy-greyed-out-for-linked-smart-objects/td-p/14371680
NOTE: The script will automatically save a new linked copy of the original linked file adding " copy" to the name.
*/

#target photoshop

// Smart object action manager properties
var ref = new ActionReference();
ref.putProperty(charIDToTypeID("Prpr"), stringIDToTypeID("smartObject"));
ref.putEnumerated(charIDToTypeID("Lyr "), charIDToTypeID("Ordn"), charIDToTypeID("Trgt"));
var so = executeActionGet(ref).getObjectValue(stringIDToTypeID("smartObject"));

// Conditional check for the active layer being a linked smart object
if (so.getBoolean(stringIDToTypeID("linked"))) {
    // Single history stage undo
    activeDocument.suspendHistory("New Linked Smart Object via Copy.jsx", "main()");
}


function main() {

    // Doc path, name and extension variables
    var thePath = so.getPath(stringIDToTypeID("link")).fullName.replace(/(^.+\/)(.*)/, '$1');
    var theName = so.getString(stringIDToTypeID("fileReference")).replace(/\.[^\.]+$/, '');
    var theExt = so.getString(stringIDToTypeID("fileReference")).replace(/(.+)(\.[^\.]+$)/, '$2');

    // Duplicate the linked file adding copy to the name
    var theCopy = new File(thePath + theName + " copy" + theExt);
    if (!theCopy.exists) {
        new File(thePath + theName + theExt).copy(thePath + theName + " copy" + theExt);
    } else {
        throw alert('File "' + thePath + theName + theExt + '" exists, script cancelled!');
        //throw null;
    }

    // Set the reference to the original doc name
    var origDocName = activeDocument.name;

    // Dupe the smart object layer to a new temp doc
    function s2t(s) {
        return app.stringIDToTypeID(s);
    }
    var descriptor = new ActionDescriptor();
    var reference = new ActionReference();
    var reference2 = new ActionReference();
    reference.putClass(s2t("document"));
    descriptor.putReference(s2t("null"), reference);
    descriptor.putString(s2t("name"), "tempDoc");
    reference2.putEnumerated(s2t("layer"), s2t("ordinal"), s2t("targetEnum"));
    descriptor.putReference(s2t("using"), reference2);
    descriptor.putString(s2t("layerName"), activeDocument.activeLayer.name);
    executeAction(s2t("make"), descriptor, DialogModes.NO);

    // Relink to the duplicated file copy
    var idplacedLayerRelinkToFile = stringIDToTypeID("placedLayerRelinkToFile");
    var desc15 = new ActionDescriptor();
    var idnull = stringIDToTypeID("null");
    desc15.putPath(idnull, new File(thePath + theName + " copy" + theExt));
    executeAction(idplacedLayerRelinkToFile, desc15, DialogModes.NO);

    // Dupe the relinked temp doc layer back to the original doc
    function s2t(s) {
        return app.stringIDToTypeID(s);
    }
    var descriptor = new ActionDescriptor();
    var reference3 = new ActionReference();
    var reference4 = new ActionReference();
    reference3.putEnumerated(s2t("layer"), s2t("ordinal"), s2t("targetEnum"));
    descriptor.putReference(s2t("null"), reference3);
    reference4.putName(s2t("document"), origDocName);
    descriptor.putReference(s2t("to"), reference4);
    descriptor.putString(s2t("name"), activeDocument.activeLayer.name);
    executeAction(s2t("duplicate"), descriptor, DialogModes.NO);
    activeDocument.close(SaveOptions.DONOTSAVECHANGES);
}

An updated 1.2 script: Rather than cancelling the script if the new filename exists, the script will prompt for a new filename:
 

/*
New Linked Smart Object via Copy.jsx
Stephen Marsh
https://community.adobe.com/t5/photoshop-ecosystem-discussions/why-is-new-smart-object-via-copy-greyed-out-for-linked-smart-objects/td-p/14371680

v1.0 - 25th January 2024:
Initial release.

v1.1 - 27th January 2024:
Added filename validation so as not to overwrite an existing file.

v1.2 - 19th September 2026: 
If the replacement file already exists, the user is prompted for a new name
(validated, re-prompted until valid) instead of the script cancelling.
Cancelling the prompt exits cleanly without changes.
*/

#target photoshop

// Smart object action manager properties
var ref = new ActionReference();
ref.putProperty(charIDToTypeID("Prpr"), stringIDToTypeID("smartObject"));
ref.putEnumerated(charIDToTypeID("Lyr "), charIDToTypeID("Ordn"), charIDToTypeID("Trgt"));
var so = executeActionGet(ref).getObjectValue(stringIDToTypeID("smartObject"));

// Conditional check for the active layer being a linked smart object
if (so.getBoolean(stringIDToTypeID("linked"))) {
    // Single history stage undo
    activeDocument.suspendHistory("New Linked Smart Object via Copy.jsx", "main()");
}

function main() {

    // Doc path, name and extension variables
    var thePath = so.getPath(stringIDToTypeID("link")).fullName.replace(/(^.+\/)(.*)/, '$1');
    var theName = so.getString(stringIDToTypeID("fileReference")).replace(/\.[^\.]+$/, '');
    var theExt = so.getString(stringIDToTypeID("fileReference")).replace(/(.+)(\.[^\.]+$)/, '$2');

    // Default copy filename
    var copyName = theName + " copy";

    // Check for filename clashes and allow the user to enter a new filename
    var theCopy = new File(thePath + copyName + theExt);

    if (theCopy.exists) {

        var validName = false;

        while (!validName) {

            var newName = prompt(
                'The file "' + copyName + theExt + '" already exists.\n\n' +
                'Enter a new filename:',
                copyName
            );

            // Cancel
            if (newName === null) {
                return;
            }

            // Remove leading/trailing spaces
            newName = newName.replace(/^\s+|\s+$/g, '');

            // Validate filename
            if (newName === '') {
                alert('Filename cannot be blank.');
                continue;
            }

            // Remove extension if the user entered the original extension
            var extRegex = new RegExp('\\' + theExt + '$', 'i');
            if (extRegex.test(newName)) {
                newName = newName.replace(extRegex, '');
            }

            // Check for invalid Windows filename characters
            if (/[\\\/:\*\?"<>\|]/.test(newName)) {
                alert(
                    'The filename contains invalid characters.\n\n' +
                    'The following characters are not allowed:\n' +
                    '\\ / : * ? " < > |'
                );
                continue;
            }

            // Prevent the new filename from matching the original
            if (newName.toLowerCase() === theName.toLowerCase()) {
                alert(
                    'The new filename cannot be the same as the original filename.'
                );
                continue;
            }

            // Check whether the new filename already exists
            theCopy = new File(thePath + newName + theExt);

            if (theCopy.exists) {
                alert(
                    'The file "' + newName + theExt + '" already exists.\n\n' +
                    'Please enter a different filename.'
                );
                copyName = newName;
                continue;
            }

            // Filename is valid and available
            copyName = newName;
            validName = true;
        }
    }

    // Final copy file
    theCopy = new File(thePath + copyName + theExt);

    // Duplicate the linked file
    if (!new File(thePath + theName + theExt).copy(theCopy.fsName)) {
        alert(
            'Unable to create the copied file:\n\n' +
            theCopy.fsName
        );
        return;
    }

    // Set the references to the original doc name and original layer ID
    var origDocName = activeDocument.name;
    var origLayerID = activeDocument.activeLayer.id;

    // Attempt to unlock the layer before it is duplicated to the temp doc
    try {
        unlockActiveLayer();
    } catch (e) {}

    // Dupe the smart object layer to a new temp doc
    var descriptor = new ActionDescriptor();
    var reference = new ActionReference();
    var reference2 = new ActionReference();
    reference.putClass(s2t("document"));
    descriptor.putReference(s2t("null"), reference);
    descriptor.putString(s2t("name"), "tempDoc");
    reference2.putEnumerated(s2t("layer"), s2t("ordinal"), s2t("targetEnum"));
    descriptor.putReference(s2t("using"), reference2);
    descriptor.putString(s2t("layerName"), activeDocument.activeLayer.name);
    executeAction(s2t("make"), descriptor, DialogModes.NO);

    // Relink to the duplicated file copy
    var idplacedLayerRelinkToFile = stringIDToTypeID("placedLayerRelinkToFile");
    var desc15 = new ActionDescriptor();
    var idnull = stringIDToTypeID("null");
    desc15.putPath(idnull, theCopy);
    executeAction(idplacedLayerRelinkToFile, desc15, DialogModes.NO);

    // Dupe the relinked temp doc layer back to the original doc
    var descriptor2 = new ActionDescriptor();
    var reference3 = new ActionReference();
    var reference4 = new ActionReference();
    reference3.putEnumerated(s2t("layer"), s2t("ordinal"), s2t("targetEnum"));
    descriptor2.putReference(s2t("null"), reference3);
    reference4.putName(s2t("document"), origDocName);
    descriptor2.putReference(s2t("to"), reference4);
    descriptor2.putString(s2t("name"), activeDocument.activeLayer.name);
    executeAction(s2t("duplicate"), descriptor2, DialogModes.NO);

    // Close the temp doc (still the active doc), which returns focus to the original doc
    activeDocument.close(SaveOptions.DONOTSAVECHANGES);

    // The new relinked layer is now the active layer in the original doc, store its ID
    var newLayerID = activeDocument.activeLayer.id;

    // Select the original (previous) layer in the stack
    try {
        selectLayerByID(origLayerID);
    } catch (e) {
        alert('Unable to select the original layer:\n\n' + e.message);
        return;
    }

    // Delete the now redundant original layer (already unlocked above)
    try {
        app.activeDocument.activeLayer.remove();
    } catch (e) {
        alert(
            'Unable to delete the original layer. It may still be locked.\n\n' +
            e.message
        );
    }

    // Reselect the new relinked layer
    try {
        selectLayerByID(newLayerID);
    } catch (e) {
        // Selection is left as-is
    }
}


///// Functions /////

function s2t(s) {
    return app.stringIDToTypeID(s);
}

function selectLayerByID(id) {
    var desc = new ActionDescriptor();
    var ref = new ActionReference();
    ref.putIdentifier(s2t("layer"), id);
    desc.putReference(s2t("null"), ref);
    desc.putBoolean(s2t("makeVisible"), false);
    executeAction(s2t("select"), desc, DialogModes.NO);
}

function unlockActiveLayer() {
    var lyr = activeDocument.activeLayer;
    var locked = false;

    try {
        if (lyr.allLocked || lyr.pixelsLocked || lyr.positionLocked || lyr.transparentPixelsLocked) {
            locked = true;
        }
    } catch (e) {
        // Lock state could not be read, attempt the unlock anyway
        locked = true;
    }

    if (!locked) {
        return;
    }

    try {
        lyr.allLocked = false;
    } catch (e) {}
    try {
        lyr.pixelsLocked = false;
    } catch (e) {}
    try {
        lyr.positionLocked = false;
    } catch (e) {}
    try {
        lyr.transparentPixelsLocked = false;
    } catch (e) {}
}

function deleteActiveLayer() {
    var desc = new ActionDescriptor();
    var ref = new ActionReference();
    ref.putEnumerated(s2t("layer"), s2t("ordinal"), s2t("targetEnum"));
    desc.putReference(s2t("null"), ref);
    executeAction(s2t("delete"), desc, DialogModes.NO);
}

The following script can be used to create a New Linked Smart Object via Copy, creating a copy of the original linked file and relinking it to the new file:

/*
New Linked Smart Object via Copy.jsx
v1.0 - 25th January 2024, Stephen Marsh
https://community.adobe.com/t5/photoshop-ecosystem-discussions/why-is-new-smart-object-via-copy-greyed-out-for-linked-smart-objects/td-p/14371680
CAUTION: The new copy file will overwrite an existing file of the same name! If the linked file was named "my-file.psd" the script will create a new file named "my-file copy.psd" which would overwrite an existing file of the same name.
*/

#target photoshop

// Smart object action manager properties
var ref = new ActionReference();
ref.putProperty(charIDToTypeID("Prpr"), stringIDToTypeID("smartObject"));
ref.putEnumerated(charIDToTypeID("Lyr "), charIDToTypeID("Ordn"), charIDToTypeID("Trgt"));
var so = executeActionGet(ref).getObjectValue(stringIDToTypeID("smartObject"));

// Conditional check for the active layer being a linked smart object
if (so.getBoolean(stringIDToTypeID("linked"))) {
    // Single history stage undo
    activeDocument.suspendHistory("New Linked Smart Object via Copy.jsx", "main()");
}


function main() {

    // Doc path, name and extension variables
    var thePath = so.getPath(stringIDToTypeID("link")).fullName.replace(/(^.+\/)(.*)/, '$1');
    var theName = so.getString(stringIDToTypeID("fileReference")).replace(/\.[^\.]+$/, '');
    var theExt = so.getString(stringIDToTypeID("fileReference")).replace(/(.+)(\.[^\.]+$)/, '$2');

    // Duplicate the linked file adding copy to the name
    new File(thePath + theName + theExt).copy(thePath + theName + " copy" + theExt);

    // Set the reference to the original doc name
    var origDocName = activeDocument.name;

    // Dupe the smart object layer to a new temp doc
    function s2t(s) {
        return app.stringIDToTypeID(s);
    }
    var descriptor = new ActionDescriptor();
    var reference = new ActionReference();
    var reference2 = new ActionReference();
    reference.putClass(s2t("document"));
    descriptor.putReference(s2t("null"), reference);
    descriptor.putString(s2t("name"), "tempDoc");
    reference2.putEnumerated(s2t("layer"), s2t("ordinal"), s2t("targetEnum"));
    descriptor.putReference(s2t("using"), reference2);
    descriptor.putString(s2t("layerName"), activeDocument.activeLayer.name);
    executeAction(s2t("make"), descriptor, DialogModes.NO);

    // Relink to the duplicated file copy
    var idplacedLayerRelinkToFile = stringIDToTypeID("placedLayerRelinkToFile");
    var desc15 = new ActionDescriptor();
    var idnull = stringIDToTypeID("null");
    desc15.putPath(idnull, new File(thePath + theName + " copy" + theExt));
    executeAction(idplacedLayerRelinkToFile, desc15, DialogModes.NO);

    // Dupe the relinked temp doc layer back to the original doc
    function s2t(s) {
        return app.stringIDToTypeID(s);
    }
    var descriptor = new ActionDescriptor();
    var reference3 = new ActionReference();
    var reference4 = new ActionReference();
    reference3.putEnumerated(s2t("layer"), s2t("ordinal"), s2t("targetEnum"));
    descriptor.putReference(s2t("null"), reference3);
    reference4.putName(s2t("document"), origDocName);
    descriptor.putReference(s2t("to"), reference4);
    descriptor.putString(s2t("name"), activeDocument.activeLayer.name);
    executeAction(s2t("duplicate"), descriptor, DialogModes.NO);
    activeDocument.close(SaveOptions.DONOTSAVECHANGES);
}

CAUTION: The new copy file will overwrite an existing file of the same name! If the linked file was named "my-file.psd" the script will create a new file named "my-file copy.psd" which would overwrite an existing file of the same name.

https://prepression.blogspot.com/2017/11/downloading-and-installing-adobe-scripts.html

We're going to have to agree to disagree then :]

I'm not talking about use cases, I'm describing the difference between the two types of Smart Objects. A linked SO is fundamentally different to an embedded SO. Photoshop isn't InDesign, links work differently.

To break the link to the original, the linked file would need to be duplicated and relinked to the new separate file. It's still linked, just linked to a different file.

EDIT: This could of course be automated so that a duplicate file is created and relinked.

".... There is no way to break the relationship between an original and a copy for a linked file. It makes logical sense as this is a linked file. ..."
here i disagree: what about a use case where you need to replicate a SMO, let's say with all having the same layer FX applied and then e.g. to reposition these copies in a file and then replace their linked content to different external files. this would be a use case where "New Smart Object via Copy" would absolutely make sense.
e.g. think of an SMO (with a drop shadow and a frame) with several copies containing different artworks to be placed separately on a gallery wall.