Azure AD B2B collaboration is intended for organizations that want to be able to authenticate users from partner/supplier organization, regardless of the identity provider, and be able to manage the lifecycle of those guest users. These accounts are managed in the same directory as employees, and can be added to the same groups and resources.
Azure AD B2C is intended for commerce and other interactions with consumers, citizens, or members of another group that does not require access to internal resources. These accounts are managed in a separate B2C directory, and are completely separate from your internal user accounts. B2C accounts are a customer lifecycle: they are either managed by the customer, or directly by the application.