Thanks Kirk. Sent a sample file via wetransfer.
Just to clarify (for future readers of this thread), the problem I've seen is NOT related to my external drive, as I first thought. Also, if you're using the default IPTC/XMP settings, everything works fine.
Kirk: Seems like my problem is related to these two settings:
"Allow RAW files to be modified" was unchecked AND
"Read embedded IPTC" was set to first, as seen in screenshot above.
..perhaps in combination with my NEF files (Nikon D4 - with in-camera embedded copyright information - not sure if this is IPTC or EXIF data)
Thanks for the sample file. I couldn't find any IPTC data, but the NEF does have embedded XMP metadata produced by your camera. Your previous settings in PM had PM set to read embedded IPTC first, embedded XMP second, and sidecar XMP last.
The NEF contained this metadata which doesn't have a rating:
<?xpacket begin="" id="W5M0MpCehiHzreSzNTczkc9d"?>
<rdf:Description rdf:about="" xmlns:xmp="http://ns.adobe.com/xap/1.0/
<xmp:CreatorTool>NIKON D4 Ver.1.10 </xmp:CreatorTool>
PM read this data as directed and ignored the sidecar XMP.