The distinction shows up when data is deleted — that's the clearest way to think about it.
iCloud Backup is a snapshot of the iPhone: device settings, Home Screen layout, app data for apps that don't sync on their own, messages (when Messages in iCloud is off), and photos (when iCloud Photos is off). It runs roughly daily when the phone is plugged in, locked, and on Wi-Fi.
iCloud Sync keeps the live, canonical copy of specific services — iCloud Photos, Messages in iCloud, iCloud Drive, Notes, Contacts — up to date across devices. Crucially, data that's already synced is NOT included in the backup, and Apple Watch backups live inside the iPhone's backup.
So: delete a photo from the iPhone while iCloud Photos is on → it's deleted everywhere, including the cloud, and the next backup won't contain it. With iCloud Photos off, the photo is part of the backup until that backup is overwritten.
To see what a backup actually contains: Settings → [your name] → iCloud → iCloud Backup → the device entry lists what was backed up and when.
Sources: https://support.apple.com/108770
— Osnivo Guides