I am using a NEX 7. Color space options on the camera are sRGB and AdobeRGB. Does Lightroom care about the camera color space settings when it sees RAW files?
No Raw converter cares about any camera's in-camera colour space selection.
Obviously the raw image is in the camera sensor's native colour space. Lightroom converts the image from the sensor colour space to a working space of ProPhoto RGB. Some raw convertors allow you to choose the working space (e.g. Adobe Camera Raw in Photoshop).
But Nikon raw convertors (View NX2 and Capture NX2) do read the camera colour space setting stored in metadata in the raw file, and by default use that as the working space.
Colorspace is used in-camera for creating the jpeg preview embedded in the raw file (and/or jpeg sidecar).
The colorspace is embedded in the jpeg sidecar, and so Lightroom will respect it.
The colorspace is *usually* NOT embedded in the raw preview (although in my opinion it should be). Its in the raw file as proprietary metadata.
All camera manufacturer softwares respect the colorspace for initial raw preview, but Lightroom does not.
(Lightroom doesn't attend to any proprietary metadata, except white balance).
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