Does Bulk Mockup respect the rotation of a Smart Object layer in the original PSD when generating mockups, or do the inserted designs remain unrotated?

Yes it will rotate the smart object, if your mockup PSD has a rotated Smart Object (say, tilted 20 degrees to match a model's posture), your design will appear in that rotation context.

However if you do not get the desired result:

• Test one PSD manually: Place a design into the Smart Object and save it. See how it appears.

• If it looks good manually, Bulk Mockup will replicate that appearance with your batch designs.

• If the result is skewed or misaligned, you may need to pre-rotate your designs to compensate, or adjust the mockup's Smart Object layer.