digiKam generally creates or updates XMP sidecars when the files are imported or managed through digiKam, not simply because image files were copied into a watched folder by hand.

If you manually copied photos into the digiKam folder, the correct process is to import those files into digiKam so it can write the XMP sidecars. Your metadata settings allow sidecar use, but they do not mean sidecars will necessarily be generated just from an external file copy alone.

So the practical workflow is:

• copy or connect the source images
• import them through digiKam
• let digiKam write metadata/XMP sidecars

If files were already copied by hand, add/import them within digiKam so it can process them and create the sidecars.