Without going into too much detail, this rule produces more rounder surfaces. It outputs only quad polygons, the control mesh can have N-gon polygons. Thus, when animating, you'll have strange proportions and the contact of the subdivided mesh. The control mesh can become huge and exagerated when trying to create sharp edges. Also You may subdivide further to gain precision on the subdivided mesh but this will lead to heavy mesh.
Solution can be edge value crease.
The PROS are that with the geometry approximation mode you've got a one stop solution to texturize the subdiv correctly and fast. This mode is better with edges and vertecies because it produces a quad for every edge and a N sided polygon for a vertex that shares N edges. This is the reason why it generates a subdiv closer to the mesh control shape. Adding detail is generally easier and the LW poly mesh still represents the resulting subdivs accurately. The control mesh may be made of N gons too, and the Subdivs will produce N-gons, thus optimizing and concentrating edges where needed.