The name of the two types of PreDef (Custom and Embed) objects originally reflected how the original engine dealt with them. I have now renamed Type=Custom to Type=Normal (which is also equivalent of not specifying a Type at all) and
renamed Type=Embed to Type=Scripted
Type=Normal still gets the graphics from Worlds\[Universe]\[World]\PreDef or Default\PreDef as it used to, and just like the physical or joint object it's not meant to have any scripting abilities except linking to a special property.
Type=Scripted now gets the full animations from sub-folders within Worlds\[Universe]\[World]\Scripted or Default\Scripted which is probably where the actual script that controls their animation and behaviour should be located too.
I've exported all animations from the game and put them in sub-directories of Default\Scripted\
I hope these changes makes sense!