Calling all VIDEO users- 3rd Party Edit question

I've seen posts before that mention exporting the SL video to edit in another tool and then bring it back into Storyline. 

A few questions -

1) Is a conversion process necessary?

2) If so, am I right to assume that a re-inserted video would be in MP4 or other format and lose the ability to use View,Try or Test mode?

Has anyone done any external editing that can share some tips with me?



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