A png is a compressed image. It has a fixed size, if you try to make it larger or smaller, it will need to either duplicate or delete data. Too large or too small, and it does not look right (too large is worse than too small).
The output vector is a series of commands that tell how to draw something. These commands are scalable, so a well-executed vector drawing will look just as good at 1000x1000 as it does at 100x100.
The advantage of png is its lightness and relatively fast performance. The selectable vector is slower (you need to execute the commands) and it is more difficult to create a good one. But it scales better. If scaling is not required, it is possible that png is what you want. If so, you may need a vector.
Also note that some types of images work better for vectors than others - the icon is a good use of the vector. Photography will not work.
Gabe sechan
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