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Selfhosted
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The difference is you can get an nvidia shield, sideload whatever apps you want (SmartTubeNext for youtube, a new home screen that doesn't have ads, moonlight for local game streaming, etc), and then block your tv from the internet. The nvidia shield has a better cpu than any other android tv setup, and it can do 4k, hdr, and dolby vision. It can handle a usb dac for a much better audio setup, usb controllers, and bluetooth controllers for gaming.
EDIT: Additionally, it's a smart idea to separate devices that have different life cycles. If a new TV comes out that you want to upgrade to, you can do so without replacing your smart interface. If a new nvidia shield replacement comes out, you can switch to that without replacing the TV
yeah, any android tv device will have access to some subset of the features of the nvidia shield, but I don't know of any others that can handle 4k60 with hdr and dolby vision, and none have the same codec support (so you'll never need to transcode on jellyfin). not to mention the fact that the nvidia shield will be way snappier than any other device out there, which I know I appreciate.
If you have an android tv right now, then the benefits come from getting a much more performant external android tv box. If you have a non-android smart tv, then there are many more benefits.