If You Talking About
File-Generate-Image assets then it's quite simple;
Basically When This Option is enabled-
It Loops Through All layers and searches for suffixes like .png .jpg .gif .svg and so on and once it finds such layer name; it automatically saves that layer or group with that name; Hard To Understand? here is example:
Assume you have a group of 3 Layers named Circle; Square and Image; and your group name is MyShapes;
If You Rename Group to MyShapes.jpg And When you save the file; you will get A new folder with name [yourPSDname]-assets and under that folder, you will find a jpg created. It's kinda handy when you make web designs and app designs.
Pros = Saves A Lot Of Time With Many supported file types. svg also supported but useless since it will not convert your layer to vector.
Cons = Each saved Layers will be trimmed automatically So Don't use this if you want some free margin left in your assets;
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