Deleting a photo from album also deletes photo from photos library

Albums are just referencing the photos in the library. You are seeing the same photo as in the main "Photos" view. As miyalunexplained, every photo or video item is only stored once. You can add a photo to ten or more different albums, without having duplicates.

When you want to remove a photo from an album, but want to keep in the Photos Library, do not use the delete key.

Ctrl-click or right click the photo and use the command "Remove from Album" instead.

Putting photos into an album doesn't mean that it is duplicating the photo. It's only one copy but you can manage how you want it to be organised. It is also not using additional space on your hard drive.

The problem is, that the delete key is behaving differently, depending on the state. That is a bad design decision by Apple.

• in the Photos view it will delete the photo,
• in an album, it will remove it from the album.

And it is easy to forget, if on is in an album or in a view, where the photo will get deleted. If you use the menu item, you will see, if you are removing or deleting the photos.