Connect the iPhone to the computer, click on the device in iTunes, and under Summary there are two buttons as described in the question.
What is the difference in terms of what is actually restored?
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Restore Backup restores the contents of an iPhone backup performed sometime in the past. It restores content and stored data such as app settings, home-screen layouts, etc. Saved account login information is restored if the backup was encrypted.
Restore iPhone wipes the iPhone of all data & apps and reinstalls iOS, leaving the iPhone reset to factory settings. The iPhone is left with just the latest iOS and the Apple default apps.
Find My iPhone must be turned off for either to work.
Restore backup mean that you restore your iPhone from an iTunes backup, or the backup you made by other iPhone backup tools before. After restore, all the data in the backup will replace the current data on your iPhone.
Restore iPhone is like erasing all the content and settings on your iPhone which you can do it by going to Settings > General > Reset > Erase All Content and Settings on your iPhone. It will wipe all the data on your iPhone.
Note that no matter you restore iPhone from backup or restore it directly by iTunes, all the data which is currently on your iPhone will be removed and no way to recover it. So back up your iPhone before you do this.
This same thing happened to me. I restored my phone and the. Jail role again. That time the jailbreak didn't complete(there was a blue screen at the end of jailbreak) After that for the third time I jail broke and this time it worked. Now I can use jailbreak freely. I hope that helped. Have a good day