Public category is for creating NFTs or SBTs containing files that are visible publicly on the blockchain. Private category only stores the file hash string (such as 4669105d5a7440f09650d63986ccc1161efab6a252a1e5e5ddbb425410252564) in the NFT.
Typically, you’d always use the public category. You would only use the private category when you need to notarize a personal file that you do not which the public to access. Thus, the file hash acts as proof of your file’s existence by carrying its hash string on the blockchain.