Open Smart Object in... option

I think your work-around could be improved. 
• Layer > Smart Objects > Export Contents
• open file in Illustrator 
• save as pdf-compatible ai 
• Layer > Smart Objects > Replace Contents 
That way scale and position of the SO should be maintained. 

Which editing steps do you have to perform on the pdfs that Acrobat cannot handle? 

Thank you for the streamlined process, will use that from now on.

But PS -> AI and back to PS on save would be better. As for which editing steps can't be done in Acrobat; all of them!

We do work for Sony Pictures and sometimes layers in their Photoshop files are PDF smart objects. None of the pro-level graphic design changes we need to make can be done in Acrobat.

Hope that makes sense.

If you are in windows you can change file association and Photoshop will open it in associated program. Even in Affinity Designer. Once you save it it will be replaced. Make sure that you are overriding file in temp folder. File association is settings in Windows out of Photoshop.

Yes but I don’t want to open every PDF in Ilustrator by default and would prefer to keep the file associations as they are. Cheers

Just to be super-clear, I'm suggesting an 'Edit Contents In...' option in the following menus:

Layer > Smart Objects
Layers Palette > Right-hand menu
Layer Contextual Menu (right-click layer)

As a designer, I never edit anything in Acrobat and I'm sure many designers (and other CC users) need the same professional-level control over which app edits smart objects.

See attached for a mock-up.