Is that what a PNG file look like readable text? When I export a rectangle shape from Photoshop as an svg below is the readable data in the SVG file/ Do you think that that is also a png image? I see text that look like the rectangle coordinates on the SVG Canvas. I do not see where its black color is recorded. When Photoshop scales the canvas size it would also scale the rectangle coordinates it would be a vector resize IMO and since the files is in the Smart Object Layer's object one way or an other. Placed SVG files and AI files can be a Vector Smart object It is true that if you open an SVG or AI file in Photoshop it will be Opened as a single merged layer that is a raster layer. However the SVG and AI files are vector files ant that is what is in the placed layer's object. If you transform the smart object layer Photoshop would Just need to scale the file like it can when Photoshop opens a vector file and scales it to size.
Work with Smart Objects in Photoshop
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