Hi Old Toad, thanks for chiming in!
>Are you able to select a photo and use the File ➙ Show Referenced File in Finder menu option?
Yes
>Have you tried doing about 100 photos only?
Initially tried consolidating just under 18 K pictures. A little over 2K pictures were consolidated with no problems. Of the 15k or so remaining referenced ones, I have tried 1 at a time, a few at a time, about 100 at a time, or all at once. None of these approaches work.
>Where are the referenced files located?
All the referenced files are in the ~/Pictures/Originals folder. Within that folder they are in subfolders by:
YYYY/MM/Activity name/yyyy mm Activity name 01.JPG (in sequence augmenting counter no. 02 ... to nn.JPG)
So they are in the same folder ~/Pictures as the "Phots Library" library.
I have used the Apple Mac Photos library repair tool on the library with no issues noted/reported. I have also run external tools on the library to make sure there is not a single referenced picture in the Photos library that does not correctly point to the appropriate file on the "Originals" folder described above.
I even tried installing a copy of the "Originals folder. and a copy of the Apple Mac Photos library on a newly configured MacBook Air I own and I see the same behavior (no pictures get consolidated). For what it's worth my main Mac is an M1 Mac mini and the MacBook Air is an M2.