HDR TONING ONLY WORKS ON A FLAT IMAGE
As cool as the new HDR Toning feature is, there is still one little caveat. You can only apply to a flattened image. Meaning no layers. It will prompt you to flatten the image if you try. Also it will not work on a smart object. Believe me, we tried. Best thing to do is apply the image in a duplicated flattened version and then drag into your layered document.