What is the difference between a Teams-connected SharePoint site and a stand-alone site?

Introduction

There are several types of SharePoint sites available. These include Teams-connected sites and sites that are standalone. Functionally there is little difference since they have the same basic features, however they are different in terms of how they behave.

A Team-connected SharePoint site is automatically created when a Team is requested. Existing standalone sites cannot be "teamified".

Explanation

Here are the major differences between the two:

All members of a Microsoft Team have the same level of access (edit) to the site. If you have the need for more granular permissions (certain areas with restricted access etc.), it becomes a bit more complicated.
Edit level permissions means all your Team members can add new pages, libraries and lists to the site as well as delete entire libraries. Edit is fairly powerful; Teams is not recommended for critical content that needs to be tightly controlled because of the limited permissions (Read, Edit or Full control). If someone deletes the Team (accidental or otherwise) all of your content is gone.
The default storage for a Team is limited and capped. It is not intended as a permanent repository/archive.
External sharing is enabled by default.
A Teams-connected site is fully modern (no scripting) so it cannot be customized with SPDesigner or on page scripts.
Your default library has limitations and is tied to a channel (Files in the Teams interface).
Group-owned Forms can only be stored in a Teams-connected site.

Recommendations for use

If the real-time group chat function is valuable for completing a project, then it makes sense to use Teams. Teams is very collaboration focused. If you are not going to use the group chat, then it is recommended to use a stand-alone site. It is also possible to move content between sites, so that a group could use a Teams site for project work, but have a stand-alone site for "authoritative" documents. Something to consider, but this will require proactive governance and maintenance.