Hi there, 🍎unintuitive.
I see that you're wondering what the difference is between Bookmarks and Favorites in Safari on your phone, and I'm glad to help with this.
Bookmark favorite webpages in Safari on iPhone -- Favorites is a subset of Bookmarks. If you press and hold the Bookmark icon, you're given the option to Add Bookmark, or Add to Reading List. If you choose either of these options, the site that was bookmarked doesn't show up in Favorites. You can access your Favorites from the Bookmarks, but you can't access Bookmarks from Favorites. This way you can access your favorite sites a bit easier than digging through all of your bookmarks.
If you tap the bookmark icon at the bottom of a Safari page, you can see how Bookmarks are sorted. If the top of the screen shows you're on Favorites, tap the left-pointing arrow at the top until the title shows "Bookmarks". You'll find the Favorites folder there.
Take care.