Q: Does and embedded profile in a digital photographic file limit adjustment of the file in Adobe Photoshop or other products?

A: An embedded color profile or an assignment of a profile in Photoshop does not actually change the data in the file, it merely tells the application how to interpret those color numbers. It describes what Red, Green and Blue look like and how they appear in various combinations. This does not limit the adjustments you can make. Note  however, assigning different profiles to the same image data will produce different results. If you start off with an image that has an embedded profile or sRGB and then assign it Adobe RGB (1998), the image will become much more vivid. This is because the Adobe RGB (1998) color space is much larger than sRGB, so "red" is much "redder". If you want a full understanding of profiles and color management, I would recommend picking up a copy of "Real World Color Management" by Bruce Fraser. It covers all the fundamentals as well as practical aspects and specific settings for various programs.