This paper establishes the case that the process of quasifree $\ensuremath{\eta}$ photoproduction from nuclei is an important tool to study medium modifications and changes to the elementary process $\ensuremath{\gamma}\stackrel{\ensuremath{\rightarrow}}{N}\ensuremath{\eta}N$ in the nuclear medium. We investigate the sensitivity of the differential cross section, recoil nucleon polarization, and the photon asymmetry to changes in the elementary amplitude, medium modifications of the resonance ${(S}_{11}{,D}_{13})$ masses, as well as nuclear target effects. All calculations are performed within a relativistic plane-wave impulse approximation formalism resulting in analytical expressions for all observables. Our results indicate that polarization observables are largely insensitive to nuclear target effects. Depending on the type of coupling, the spin observables do display a sensitivity to the magnitude of the $\ensuremath{\eta}\mathrm{NN}$ coupling constant. The polarization observables are identified to be the prime candidates to investigate the background processes and their medium modifications in the elementary process such as the ${D}_{13}$ resonance. Moreover, as a consequence of the large dominance in the differential cross section of the ${S}_{11}$ resonance, the quasifree differential cross section provides an exceptional instrument to study medium modifications to the ${S}_{11}$ resonance in such a manner that helps to distinguish between various models that attempt to understand the ${S}_{11}$ resonance and its distinctive position as the lowest lying negative parity state in the baryon spectrum.
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