Shared Photo Library vs Shared Photo Album on iCloud

The two concepts may seem similar, but they are so different that it would be simpler to list their similarities:

They are both ways to share photos among defined sets of users. Each has specific limitations and history.

Shared Photo Albums started out long ago as Shared Photo Streams, which were like stacks of photos onto which groups of users could append their own contributions and comment on those of others; they evolved somewhat over time.

Shared Photo Libraries are a much more recent idea, extending the concept of the Library as a pool of photos upon which a user builds their organizational structure of Albums and perhaps Folders; the "Shared" part allows another user to incorporate the shared photos into the pool on which they build their organizational structure.

You can create, own, and join many Shared Photo Albums (within stated limits).

You can either create or join at most one Shared Photo Library.

Shared Photo Albums don't count against your iCloud quota, but they have their own limits on number of albums owned and shared, number and size of items contained, and rate of items added.

A Shared Photo Library counts against the iCloud quota of the creator/host but otherwise is likely to be limited only by how much quota you can afford. (No stated limit does not mean no limit, of course. Large libraries may not work well, but we haven't heard anybody cry out about hitting a problem point.)

Items added to a Shared Photo Album may be reduced in resolution or video content and will have some metadata redacted (which varies from time to time).

Items added to a Shared Photo Library have the same content as they would in your Private Photo Library.

When you add an item in your library to a Shared Photo Album, a copy is made (with the changes noted above).

When you add an item in your library to a Shared Photo Library (whether you own it or are a non-owner member), it is moved and leaves your Private Photo Library; make a copy if you want to keep a copy completely under your own control.

There are other differences, but those are the main ones that come to mind.