Explanation
The distinction matters whenever frequency is high. Impressions divided by reach gives average frequency, and a campaign with an impression count far above its reach is showing the same people the same thing repeatedly, which is a different situation from one that found more people.
On organic short-form the two numbers usually sit close together, because the distribution is built around showing a video to new audiences rather than repeating it. On paid they diverge quickly, and the gap is where budget quietly goes.
The common mistake
Reporting impressions as though they were people. It is the most common way a campaign's audience gets overstated, and the correction is usually a factor of two or three.