Wildcard - In wildcard, you setup subdomains to point to the server IP. So, when you install an app or change it's location, Cloudron won't remind you to point the DNS to the server IP.
Manual - When installing an app or changing it's location, Cloudron will remind you to point the DNS to the server IP.
Why prefer one over the other?
Wildcard is one time setup. Manual is something you have to do on each app install. People also sometimes ignore the "instructions" it shows to adjust the DNS and click Install.
Depending on your DNS provider, DNS propagation can take long. So, let's say if it takes 15 mins or something, then when installing the app, Cloudron will be unable to get certs. This can lead to a bad UX.