It should paste as a smart object.
Unfortunately, smart objects are only smart to a degree. They do not output as vector from Photoshop.
They do get rasterised to the Image resolution set in photoshop. And this is visible if the resolution is too low.
The image is only scalable as a smart object within photoshop but it will always output as raster.
The only things that output from Photoshop as vector are vector masks, vector shapes, and text layers - and these must be saved as Photshop PDF (PDP) files.
Although EPS works too - it's an antiquated file format, for example reopening an EPS in photoshop completely rasterises it and flattens all the layers.
PDF is preferred.