Again, creating a TIFF file from a RAW is the normal procedure, even for PS/LR. Verily, Lightroom is nothing but a nice face on Adobe ACR. If you were to open a RAW file directly in PS, without LR, you'd have to go through the ACR window first, make your adjustments, and then SAVE the file as a TIFF or maybe some other format. TIFF is used by the applications by default because it's a lossless format and highly versatile and compatible.
You can't save PS adjustments to a RAW (.dng, .CR2, &c.) file. You just can't. RAW files are not meant to be touched. All your LR adjustments are saved to the metadata portion of the .dng. If you use C1P they get saved to the .xmp sidecar. PS might display the file you send to it from LR, and even tell you in the tab that it's a .dng, but it won't write to it. When it's time to save your PS adjustments it will create a TIFF file and send it back to LR with the suffix "-Edit", on which you can continue to work on LR (with the difference that now the adjustments LR makes WILL be saved to the file itself, unlike the case with .dng's).
C1P, which is not using ACR, skips through all that BS and creates a TIFF file right away and sends it to PS, ready to be worked on.