Hi David,
This gets a bit complicated...
The copyright status flag you mention is stored in Adobe's "image resources". For JPEG files, this is in Adobe's JPEG application marker, which happens to also be where the IPTC record is found by virtue of Adobe putting it there and everyone adopting this location for reasons that should be obvious (despite it being a really dumb place to put it - it would make more sense to put IPTC in its own JPEG application marker).
For JPEG files, Photo Mechanic will update the copyright status to either copyrighted or "unknown" (depending on whether or not there is a non-zero copyright string in the IPTC record). This is done whenever the IPTC is updated (and the copyright status flag already exists), or when new IPTC info is added.
For TIFF files, we don't update the Photoshop resources when updating the IPTC (primarily because the IPTC record is stored elsewhere), and so this copyright flag is not changed or created at this time. Generally, this would require writing a brand new TIFF file or other "hacks" due to TIFF's inflexibility, although an existing PS resource could be updated (consider this a bug fix or feature request). However, when writing a new TIFF file (i.e. SaveAs to TIFF), we do create this flag in the Photoshop resources block, again depending on whether the IPTC copyright field is empty or not.
For PSD files, I believe we treat these like JPEGs (i.e. we update the copyright status when IPTC is updated).
PS - PM doesn't support the "public domain" option.
--dennis
