Steve, when saving 8-bit images to disk or opening them in Photoshop from ACR or Lightroom, the quantization to 8 bits is always done as the final step. Any color space conversions (e.g., from raw to Adobe RGB or sRGB) is done before that. When displaying images to the screen inside of ACR or Lr's Develop module, the exact math and precision level will depend on a few things (including CPU vs GPU use), but the color space conversion to the display profile happens before any needed quantization to the display precision. For example, for a "standard" 8-bit display pipeline we first convert to the display profile (with >= 16-bit math) and then quantize to 8 bits (with dither).
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