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Your observations are spot on and you’ve identified most of the tradeoffs. I don’t know if it’s a limitation of Lightroom or the HEIC file format, but Lightroom does indeed save metadata for HEIC files in XMP sidecar files, just like it does for Camera Raw files. If you want the metadata embedded then you’ll have to convert to JPEG. I don’t know of any other software that embeds metadata in HEIC files. In fact, most other software such as PhotoMechanic don’t support the file format at all.
Which leads me to the other, even bigger reason, that I suggest converting HEIC to JPEG. The HEIC format was introduced five years ago and Apple started using in three years ago, but the adoption rate is pretty weak across the industry. It’s not supported in no web browsers, few photo apps, and few to none DAM systems and web services.
If you decide to convert HEIC to JPEG, I suggest you use Lightroom Classic to do it. I used the free iMazing HEIC convertor for a while, but then I did a speed comparison between that app and Lightroom and Lightroom took 75% less time to achieve the same results!
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