These two tools are what you use to move, select and rotate things in 3D space. For the most part, they function similarly, you select the Tool, then choose to Scale, Move or Rotate the object. Once you start keyframing it’s best to switch to the Object tool, particularly for parametric objects which cannot be scaled non-uniformly with the Model Tool selected.

Strange things can happen if you don’t keep track of which tool you are using to Scale an object. Think of it this way, if you Scale an object non-uniformly, any object that is a child will also be scaled non-uniformly. When you first drag items and make them children, C4D automatically re-scales them to look OK. All heck breaks loose when you then rotate the child. Video shows this common error.

Note: I did not make a point of it, but make sure to watch the Coordinate Manager’s Scale numbers, particularly the Y value to see how the Model tool differs from the Object Tool.