Direct3D with sRGB - Gamma Corrected Colors

I'm coming from a Direct3D 9 background, and recently switched my custom game engine over to Direct3D12. After some research, it looked like using one of the *_SRGB formats was the way to go, because it corrected the gamma level.

Immediately, I noticed that everything nearly doubled in brightness, which was unexpected. When correcting a curve, I would expect some values to be brighter and some to be darker, but everything just appears brighter. However, I just accepted it and moved on. But now I'm noticing some other strange issues, and I'm not sure what's going on. Maybe someone could help me understand what I'm missing?

1. When I draw a primitive with a color value in either HLSL or C++, such as color(128,128,128,255) or float4(0.5,0.5,0.5,1.0), the resulting color I see on the screen is actually RGB 188,188,188. Is this to be expected? I'm reading the values of these colors in Adobe Photoshop 2022, which is in SRGB mode. Should the values not match up if both applications are using SRGB?
2. 128 to 188 is really strange, but 0.5 to 0.73 is even stranger. How do I manually construct a color that comes out the way I constructed it? For example, one might use 0.5 to scale by "half brightness", but 0.73 is definitely not half brightness. It's almost white.
3. If our textures are painted on a PC, such as in Substance Painter or Photoshop, what is the point of converting all of these colors? If the artist can see the same color space that will be used to render, why tell the display to show us something else?
4. Before I switched to sRGB, I modeled in Blender, and my textures always looked the same between Blender and my game engine. If I start using sRGB, I'm worried that will not be the case. How are artists making that work?
5. Images that I've seen that were gamma corrected are often brighter and washed out. And images that were not gamma correct are usually dark and rich. Does gamma correction cause some type of saturation loss in darker color?

I appreciate any guidance. I've done research on this topic, but most of the information goes on endlessly about linear color space. Linear is nice, because it makes math easier, but half of the stuff we deal with in a 3D app is non-linear. At this point, I'm not sure its worth it.

1&2: Gamma correction is designed to convert between light intensity as it exists in the real world, i.e. the amount of photons that hit a camera sensor, and how human beings perceive light. So if a light source is emitting 50% less photons, we see it as as around 74% of the light (individual curves may vary) so 128 should become 188.

3&4: The point of linear color is to allow us to process images in a space where an increase in the number of photons is linearly related to the increase in the intensity values. Then the linear colors are gamma corrected before presenting them to the user. When you work in those programs, you are looking at gamma corrected images.

Basically, people don't look at linear color spaces. They look wrong to us. They only exist to allow the computer to do some processing. If you have shaders that do work in linear color space, saving your images in a linear format so that they don't have to remove the gamma, do the processing, and then reapply the gamma can have performance benefits.

The problem may be that you are gamma correcting images that are already gamma corrected. If the images look right to you, they may be gamma corrected, if they look dark, with the lighter areas seemingly emphasized, they may be linear. If you are adding colors/images that look right to you, before gamma is applied, you will have to put the colors/images through inverse gamma correction.

How Applications Display/Convert Color Spaces: (Edit)

Photoshop interprets what the numbers in an image mean through the currently applied color space. It is possible to both "assign" a color space, which changes how photoshop interprets the numbers, and "convert" a color space, which changes the numbers so that they look the same (or as close as possible) when interpreted through the new color space.

This first image is in the sRGB color space. I've painted a gray dot with the values of (127,127,127).

In this second image I have converted the image to a linear color space. It looks almost the same, because photoshop always applies gamma correction so that it looks right to you, but the first dot now has the value (54,54,54). I've added a second dot with the values (127,127,127) in this color space.

In this third image, I have assigned the sRGB color space. Now photoshop thinks the numbers are in the sRGB color space, so it thinks the image already has gamma correction, and is showing us something like the way linear color space looks.

For the final image, I did everything the opposite direction, drawing a dot with a value of (127,127,127), then converting back. The last dot now has a value of (187,187,187)