Today’s Question: Does XMP include edits in the Development module?
Tim’s Quick Answer: Yes, the adjustments you apply in Camera Raw (via Photoshop) or the Develop module (in Lightroom Classic) are included when you save metadata to the source raw captures.
More Detail: When you update metadata for a raw capture in Adobe Bridge or Photoshop, that information is written to an XMP “sidecar” file rather than directly to the raw capture file itself. In Lightroom Classic metadata updates are by default only saved in the catalog, but you can save metadata to the source images as well either manually or by enabling an automatic option in the Catalog Settings dialog.
However, only standard metadata values can be saved to the metadata for the source image files in this way. For example, the pick and reject flags, virtual copies, collections, and other features specific to Lightroom Classic cannot be preserved in the metadata for the source image.
It may therefore come as a bit of a surprise then that the adjustments you apply to a raw capture using Lightroom Classic or Camera Raw can indeed be saved to the XMP sidecar file for a raw capture.
That means, for example, that if you have saved the metadata to the source file for a raw capture so that the metadata is preserved in an XMP sidecar file, that metadata will be available even if your Lightroom Classic catalog was lost or corrupted. You could simply import your raw captures into a new catalog, and the standard metadata along with the adjustments you had previously applied will be imported as well based on the metadata contained in the XMP sidecar file.