XCode supports those 2 values for this Build Setting:
Build Settings > Build Options > Debug Information Format.
Could anybody explain the differences?
The difference is that in the case of DWARF with dSYM file your Archive app.xcarchive (for adHoc distribution) contains also dSYM file needed for reverse symbolication of your code in crash reports. In general, .xcarchive contains
dSyms
Products
info.plist
So if you need it for external analysis of crash reports under archiving you app for distribution you should use DWARF with dSYM file.