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From Odwiki

There are several pitfalls of which to be aware with regards to the OTL manager configuration.

Immediate Results can be bad!

The first is that the configuration is saved to disk immediately, and is not stored with your .hip file. Thus, any queue jobs that are running Houdini that use .otl's will be subject to whatever buttons you click at that moment.

Embedded OTLs

Save Operator Definitions to Hip File This option will embed a copy of your .otl's into your hip file. When an external .otl becomes unavailable, often due to something becoming temporarily unavailable (e.g. mounted disk), Houdini will change the pointer to the .otl from the original pointer-to-disk-file to a pointer-to-the-embedded version. Thus, if the external resource becomes available again, your .hip file will continue to be using the embedded version. Furthermore, the date-stamp of the .otl is now changed to the time-of-embedding, and is thus younger than the date of the original .otl. Only once the external .otl is restored, that .otl's date is still the old date, and thus your .hip file will continue to use the embedded version.

Bug? If a case like the above happens where an OTL becomes Embedded and the original OTL becomes available again and you wish to point back to the OTL on disk, going into the OperatorTypeManager and deleting the Embedded OTL will cause any operators in your hip file to revert to the OTL on disk. This is expected behaviour, except now if you save your hipfile and re-open it, it loads with the operators embedded again. Beside rebuilding the scene in a new hipfile that never had the operator embedded, I don't know of a way to ensure that the operators will reliably continue to reference the OTL on disk.

Permissions

It may happen that you get a warning upon hitting "Accept" after editing an OTL that you don't have the necessary permissions to edit the OTL file, when in actual fact it may be the case that the backup folder has bad permissions set on it. The error message is the same for both situations and can be a little confusing.