Data is inside the Power bi, Metadata is inside the power bi.

Data (SQL Server)(Inside) + Metadata(Inside)= Import Data. When dataset is small then will use import.

Data is in outside the power BI, Meta data is inside the power BI

Data (SQL Server)(Outside) + Metadata(Inside)= Direct connection. When dataset is large

Data is outside the power BI, Metadata is outside Power BI

Data (SQL Server)(Outside) + Metadata(Outside)= Live connection