What is the relation between Sharing setting on the tenant level and the Sharing setting inside the site collection level

Question

I am a bit confused if there are any relation between the 2 sharing options:-

1. Sharing on the tenant:-

2. Sharing on the site collection:-

Is the sharing on the tenant covers only sharing to external users? while sharing on the site collection is applicable for both Internal and external? for example in my above settings, members can share files with internal users , but they can not do so for external? and is there any overlap between these settings? or each one covers separate area? is there some scenarios where one setting will override the other ?

Answer 1

The tenant permissions supersede the site collection. If you don't share outside your organization at the tenant level, then the site collection setting will restrict who can be invited to members of your organization.