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If I use an image where I know I'm going to be changing it's size in both directions for say like multiple adds, I would then convert it into a smart object. But for reduction only, no need to use smart objects for that. As long as you are not altering the original image file and you are using "save as", there's really no need to use smart objects on reductions.
For example: If I open OriginalHouseImage.jpg in Ps, I would save it a OriginalHouseImage.psd. the original image file is still available and unchanged if I need to go back to it.
If you do wish to convert your primary image into a SO. If you are working with a SO for reduction, you should not be needing the PSB container file unless you are making edits to the primary image. If you are just reducing the primary image, you would do that in the main PSD file and not in the PSB container file. The PSB container file maintains the original size and resolution of the image if you ever need to expand a crop, the original file information is stored. You should never save or use a PSB container file any other purposes. A smart object PSD file is much larger since it has to store the the original size and resolution of the primary image. There really no need for the SO if you are only reducing.
For example: If I open OriginalHouseImage.jpg in Ps, I would save it a OriginalHouseImage.psd. the original image file is still available and unchanged if I need to go back to it.
If you do wish to convert your primary image into a SO. If you are working with a SO for reduction, you should not be needing the PSB container file unless you are making edits to the primary image. If you are just reducing the primary image, you would do that in the main PSD file and not in the PSB container file. The PSB container file maintains the original size and resolution of the image if you ever need to expand a crop, the original file information is stored. You should never save or use a PSB container file any other purposes. A smart object PSD file is much larger since it has to store the the original size and resolution of the primary image. There really no need for the SO if you are only reducing.