I've recently come across a new menu command for smart objects - "Convert to Layers", I don't really understand its purpose as all it seems to do is reverting a smart object back to a raster layer. What is it meant to be used for where there already is the "Rasterize Layer"command?
Convert to Layers preserves all the layers contained within a Smart Object. If it contains vector layers, or text layers, these won't be rasterized. If there are raster layers, these will be retained as raster layers. All of the preserved layers will be placed into a group in the layers panel.
Rasterize Layer turns a Smart Object into a single raster layer, regardless of the number of layers contained within it, or whether it contains vector layers or text layers. The result will always be one raster layer.
If you only have a single raster layer in a Smart Object, both of these commands will result in a single raster layer.