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I seem to remember that in the Basic Zones (non creative) modes the settings are fixed to parameter 1 which applies saturation and sharpening adjustments for more vivid colour. Parameter 2 is more natural and is better for skin tones etc. Adobe RGB is the colour space setting, the difference between it and SRGB is the number of colours available for reproduction. Adobe RGB has a wider range of colour available than SRGB. There's a good article on colour space in Better photoshop techniques Issue 8. When you image in RAW the parameters are not applied to the RAW file.
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