Difference between a workspace and directory

There is a difference between a workspace and directory. In short a workspace has extra data set in the settings while a directory does not. Here is detail for each:

A workspace uses this icon. File-Folder-1

A workspace has at least one of the following set:

When you go to a directory and set any of the above items the directory is converted to a workspace.

A directory uses this icon.  File-Folder-2

A directory inherits the parent workspaces' permissions and team. Inherited permissions will not be shown on the users access tab.