We can now edit from within Photos with a 3rd party editor like we did with iPhoto with the app, External Editors For Photos, that installs an extension which lets us chose any 3rd party editor of our choice to use within Photos for editing.
After running the app for the first time this is how you select the external editor(s). Select External Editors in the Edit window's Extensions menu:
and your editor of choice at the right:
Here's what you need to know about editing with Photoshop or any 3rd party editor from within Photos:
Note: when I refer to the Photoshop file extension, .psd, it can be the file extension that your editor of choice uses.
1 - if you create a .psd file from a jpeg original you must save it to the desktop and import as a new file just like with iPhoto.
2 - if a jpeg is edited by PS resulting in a .psd file and it's saved without selecting the Desktop the default location will be here in a folder like this
AND the resulting folder and .psd file will be deleted automatically.
3 - if you flatten the file in PS and save it as a jpeg it will be saved correctly and recognized by Photos.
4 - if the original file is a .psd file and is edited by PS and just saved the resulting edited version will be converted to a jpeg file and recognized by Photos. Also if edited with PS a second time you'll lose the layers and just be editing a jpeg file.
5 - to keep the .psd file so you can do another edit first duplicate it and edit the duplicate file with PS. That will preserve the original .psd file and it's layers for additional edits even though the first edit will be lost to the second edit.