Photos in Separate HD folders and Photos app

Likely yes.

Open Photos

Go to Photos > Settings > General

If copy items to the photo library is selected, all of the images in your separate folder are copied into Photos; effectively that means having two copies (or at least, occupying twice the space).

If import is not selected, the photos library will instead reference the location on your computer but will not sync with iCloud. If you were to move the photo folder on your Mac, you would have to update the location in Photos.

We don’t call those duplicates; we call them backups. I think keeping those original files on an external drive is exactly what you should be doing!

And while having a referenced file like muggy referenced is possible, most of us would say it’s a really bad idea for Photos.