The external mic is recommended for voice communication while gaming on console or PC. The built-in mic is recommended for casual use-cases such as taking calls on Bluetooth devices. When the external mic is plugged in, all voice communication will be captured using that mic. When the mic is detached, all voice communication will be captured using the built-in mic. You get better voice quality with the external mic, but you get the convenience of not having something in the way with the built-in mic.