The process is different but the outcome is pretty much the same.
The application then uses ADFS (AD) or AAD for authentication.
Typically, ADFS is used for on-premises applications.
AAD can also do that plus it integrates into SaaS applications.
Preference? Depends on business use case.
Protocol support might be a decider. AAD supports WS-Fed, SAML, OpenID Connect and OAuth.
Only ADFS 4.0 has the full OpenID Connect and OAuth stack.