iCloud Apple Photo Library VS Referenced Apple Photo Library - the DIFFERENCE & WHY it MATTERS!
This video is crucial to understanding the Apple Photos Preference on a Mac of: "Copy items to the Photo library".
This setting is the key to having an Apple Photo library that is managed in one location vs having photos organized into a folder structure and referenced into Apple Photos.
If you were previously a Windows user, you're probably used to having photos and folder referenced, but if you copy the items into the Apple Photo Library, the Mac will manage all the files for you and will also give you the ability to have these files sync in iCloud Photos.