In Windowed vs Fullscreen?

When an application runs in fullscreen mode, it runs in "exclusive mode". That means it has full and direct control over the screen output. But when it runs in window mode, it needs to send its output to the window manager (windows explorer) which then manages where on the screen that output is drawn.

Is fullscreen or windowed fullscreen better?

When an application is open in fullscreen mode, Windows grants it full control of the screen's output. Assuming a game is optimized for the system and display being used, fullscreen mode has the potential to boost performance when compared to borderless windowed mode.

What is the difference between windowed and fullscreen?

Windowed is for when you want to move windows around and have multiple things on screen (rarely needed for a game). Fullscreen is for when you want only the game and get the best performance.