Firstly, you might be thinking, why do I need to know this? Well, in my opinion, there are three main reasons for having an understanding of internal vs external activities:
1. Microsoft cryptically charges you a different rate of execution hours depending on the activity category when the pipeline is triggered. See the Azure Price Calculator.
2. Different resource limitations are enforced per subscription and region (not per Data Factory instance) depending on the activity category. See Azure Data Factory Resource Limitations.
3. I would suggest that understanding what compute is used for a given pipeline is good practice when building out complex control flows. For example, this relates to things like Hosted IR job concurrency, what resources can connect to what infrastructure and when activities may might become queued.
Paul warns that this is a dry topic, but these are important reasons to know the difference.