Shapes are pasted as paths when effects or styles are applied at the group level.
Shapes are pasted as paths in Photoshop when effects or styles are applied at the group, sub-group, or sub-layer level. You will see a similar layer structure in Illustrator if you go to Object > Expand Appearances on the group with the effects applied. However, you will a different layer structure in the Layers panel of Photoshop from when objects are pasted with group-, sub-group, or sub-layer level effects. When copy-pasting objects with group-level effects from Illustrator, you can achieve visual and functional fidelity in Photoshop. Layer structure changes when objects are copy-pasted from Illustrator to Photoshop with group/sub-layer effects. So, visual fidelity is not maintained for strokes at path corners while copying strokes from Illustrator to Photoshop. The property of line miter, used to cap strokes in Illustrator, is not carried forward in Photoshop. Visual fidelity is sometimes not maintained while copying strokes with line miter. Path created with Paintbrush Tool in Illustrator is copy-pasted in Photoshop as a pixel layer, instead of being pasted as a shape layer. Paintbrush Tool path in Illustrator is copied as pixel layer. So if you copy-paste an object with knockout group functionality, the functionality will not be copied with the object. Also, the layer with knocked-out stroke will be copied as a path (or will be rasterized). Knockout group, an Illustrator functionality, is not supported in Photoshop. Other Photoshop and Illustrator interop issues Knockout group is not copied to Photoshop.