Semantic model folder appears when saving as pbip (SSAS tabular model live connection)

Hi eviswink ,

Thank you for reaching out to Microsoft Community.
Whenever you save the Power BI report, it creates a new folder called SemanticModel, and places a file called modelReference.json in it. modelReference.json stores external model connection details, it helps source control, collaboration, and deployment workflows. This file now stores the metadata about the external model connection.
The definition.pbir now references this external model via a pointer instead of storing connection details directly.
Please refer to this Microsoft document regarding semantic model folder Power BI Desktop project semantic model folder - Power BI | Microsoft Learn

If this helped, please mark it as the solution so others can benefit too. And if you found it useful, kudos are always appreciated.

Thanks,
Chaithra E.