Hello PointyHairedBoss,
These are fair questions, to which I've never given much thought.
In the Edit module, that message pops up if you make some edits then switch to another photo or a different module. If you opt to save the "Virtual Photo", it's stored in the cache folder for your project so that when you return to the edit module your edited photo is still in the same state you left it.
It is NOT the same as exporting the photo, which is an actual photo rather than stored data.
The saved virtual copy persists permanently, or until you delete it.
PIX
PIX YouTube channel