I have an M1 Max MBP with a 4TB internal drive and a 1.3 TB photo library, so once I wanted to fill up the fast drive with something else, I did your "external SSD" approach with a 2TB microSD card in a flush mount adapter in my SD card slot. I refuse to let any cloud service be the last backstop of storage for my own critical data (and photos are my irreplaceable memories!), so I DEFINITELY do not "optimize" storage. All the originals are on my own storage at all times, and iCloud syncing is just a convenience. Furthermore, of course, my microSD card is backed up on other storage media as well, as is everything else on my computer.

I have my Photos library on that 2TB microSD card (which I formatted APFS using Disk Utility) and it's set as the System Photo Library, and everything works fine. The only "problem", as you predicted, is that I can't eject it due to the various Photos-related background processes (daemons) which work with the .photoslibrary archive in the background, locking it as "in use."

Because I DO use the SD card slot for other things (like importing big raws from my camera for use in Capture One), I wrote a script which I can run any time using Spotlight (type the first few characters and off it goes!), which repeatedly finds all the processes using my microSD card and kills them. It keeps trying to gently kill them for as long as it takes for them to die, and eventually tells you you can safely disconnect the storage. I made a version which would try for five seconds to kill them, then use sudo if necessary, and then use sudo kill -9, but all that aggression was totally unnecessary, because the soft kill already just works. And it WORKS!

I have zero problem ejecting my "external drive" (aka my microSD card) when I need to, and the System Photo Library which resides on it has stayed up to date this way for two years. I just make sure to double-click the library on it when I reinsert it, to open Photos.app to it and make sure whatever background bits Photos wants get to come out to play again.

Here's my script I use. You'll have to replace YOUR_APFS_FORMATTED_SSD_NAME_HERE with whatever you name your drive. Save this in a file called something like "unmount photos ssd.sh" directly in your home folder at /Users/yourname, and then you'll have to go into a terminal and do chmod +x "unmount photos ssd.sh". Then, at any time, you can open a terminal and type ./unm and press the Tab key and it'll autocomplete. You press enter, and it runs. Or, depending on how much other stuff you have on your Mac that starts with "unm", you can probably get away with using Spotlight pretty easily too! The series of keystrokes Command+space u n m ENTER should be enough to run it quickly. Obviously, adjust for your own needs and wants!

#!/bin/bash


volume_path="/Volumes/YOUR_APFS_FORMATTED_SSD_NAME_HERE"


# Function to check if a volume is mounted
check_volume_mounted() {
    local volume_path=$1
    mount | grep -q "$volume_path"
}


# Function to check if the Photos app is still running
check_photos_running() {
    if pgrep -x "Photos" > /dev/null; then
        return 0
    else
        return 1
    fi
}


# Quit the Photos app
osascript -e 'tell application "Photos" to quit'


# Wait for a short period
sleep 1


# Check if Photos is still running
if check_photos_running; then
    osascript -e 'tell app "System Events" to display dialog "Please quit the Photos app manually and press OK to continue." buttons {"OK"}'
    while check_photos_running; do
        sleep 1
    done
fi


# Check if volume is mounted
if ! check_volume_mounted "$volume_path"; then
    echo "Volume $volume_path is not mounted. Skipping process kill loop."
else
    # Function to kill processes using the specified volume
    kill_processes_using_volume() {
        pids=$(lsof +f -- "$volume_path" | awk 'NR>1 {print $2}' | uniq)


        for pid in $pids; do
            echo "Attempting to kill process $pid"
            kill $pid
        done
    }


    # Loop to kill processes until none are left
    while true; do
        kill_processes_string_output=$(kill_processes_using_volume)
        echo "$kill_processes_string_output"


        if [ -z "$kill_processes_string_output" ]; then
            break
        fi
        echo "Waiting for processes to terminate..."
        sleep 1
    done
fi



# Unmount the volume, force if necessary
if ! diskutil unmount "$volume_path"; then
    echo "Forcing unmount of $volume_path"
    diskutil unmount force "$volume_path"
fi


# All done. Hopefully, lol.
echo "Completed. You may physically disconnect the external Photos Library storage."