Short answer: I don’t see them as alternative either/or modes of a note, but rather as different note (information) structuring techniques that should be able to be freely intermixed in a single note.
Three use cases to help illustrate:
- During development/iteration of a note: Very often, the earliest written form for me is an outline structure with simple bullet-point sentence fragments, to quickly capture the essential parts and some basic relationships, and then as I iterate on it, over time, parts progressively may get fleshed out into complete paragraphs, headings, etc.
- Final representation of a note: The ‘final’ form of a stable note may very likely still have some parts that are best presented as a true outline with outlining features. For example, the various meta-notes that are discussed elsewhere on this forum like TOCs, MOCs, and the like.
- Edit vs Preview: It is super useful when editing a longer note to have it structured in an outline fashion, with folding, hoisting (focusing), node annotations, hotkeys that move children with parents, etc, even if the final reader rendering is not going to have all this (e.g., for a PDF publication).
I should add: when thinking of outline mode, it is tempting to think purely of each node containing just short sentence fragments, like a list (which is certainly a legit and common use case), but this is limiting; each node may be a full paragraph itself.