Tiled Model => You can not edit anything with this model, the only thing you can do is create some boundary and export it to different tiles format like cesium osgb, but not any 3d file format like obj/fbx.
Blocked Model => Much more efficient than normal model, especially when you create a large model like city or part of it. and you can edit polygon, de-light, and export any kind of model like obj/fbx/osgb/cesium.
so simply put:
tiled model's only purpose is to export as tiled model format, you can not edit anything with it, but it's much much faster to build, way more faster than build blocked model, need less powerful computer to calculate.
blocked model can be edited, and exported, depends on the block size, you might need much powerful computer to calculate, if block size is big like > 400m, you need at 40G video memory to create texture for it.