Not sure where to see this option. When I open FaceTime, I need to select a contact from a list, or add one. I can add one and give it a phone number, but then I only get the opportunity to use FaceTime Audio or Video. I don't see an option to call with the iPhone.
I guess wherever you see these two options, one is using FaceTime and the other is using the mobile operator's mobile system. That would be the difference.
I also want to show that the options will be different, depending on what the contact has. Do they have a landline phone? A non-Apple phone? An Apple ID or not? A combination of all these.
The biggest reason to use FaceTime sound over the mobile phone's audio may be to save the assigned mobile operator "minutes". But also the quality can be better with FaceTime sound. And if you're on a Wi-Fi connection, with no mobile service, FaceTime can be your only option unless your carrier also offers Wi-Fi calls.