Doing the four finger salute (C/A/S/E) puts a “line in the sand” and says “nothing below this line ever needs to be changed”. Are ya sure? Is anyone going to say they’ve never put that composite Layer up and then thought “oh, I wish I could go back and tweak one little thing” in that Smart Object Layer (that I just eliminated the function of)?
Let’s take a look at a scenario: You bring an image (or set of images) into Photoshop as a Smart Object. You add four or five (or ten) Layers of different types. Retouching Layers, Adjustment Layers, Layers adding other images or objects or frames or anything else you might want to add. You then do the C/A/S/E maneuver. You add another ten Layers of different things. You use the C/A/S/E trick again to get everything neatly put together for finishing. Then it dawns on you that you might want to change out the image you added to your original stack. If you’re really lucky, maybe the newer image is exactly the same size and shape as the one that you want to replace. If it is, you can slap it up on top of everything else and you’re done. Think of it as a sticker pasted on the top of a package. It won’t have any of the interesting things you did on the ten (?) Layers below it. You could do a bunch of Clipping Masks to make all the same adjustments to the one “sticker” Layer. Wouldn’t that be a treat. You could make all the under the line tweaks into a Group and then copy the Group to above the "sticker" and clip the Group to that Layer only. There's probably another ten ways you can think of to do it, but they're all pretty clunky.
Rather than drawing a line in the sand using C/A/S/E, you can get to the point of having a composite copy of the image by selecting every Layer and converting them to a Smart Object. The elegance of getting the composite as a Smart Object is that you don’t lose that connection to all the way back to the original image that you’d be able to tweak in ACR (Adobe Camera Raw). Get to that second iteration of the Smart Object and you can build additional Layers on top of that. If you get to a place where you think you might want to make another composite Layer (C/A/S/E it again), make that whole set of Layers into another Smart Object.
In the case of today’s image I can think of a couple Smart Object opportunities. Do the work on the main portrait and the two inserts. Make them a Smart object. Basically set them aside. Do the background using a set of brushes, making a new Layer with every color or brush change. Make the entire set of the background Layers into a Smart Object. We now have two Smart Objects, the portraits and the background elements. If there’s something you feel you have to do to both Smart Objects, select both of them and make them a new Smart Object.
You can go on like that, basically, forever without ever losing the ability to get back to the original Raw files. It certainly beats drawing a line in the sand and needing to wipe out whatever is above the line to make a change in something below the line. That’s just dumb.