The differences explained
Protected batteries
A protected battery has a small built-in electronic board which is designed to protect the battery in certain situations, for example, it should not overcharge and it should cut out before overheating.
Overheating a battery is bad for the battery and bad for coils, and will shorten their life. In the worst case a battery could explode inside the e-cigarette, but a protected battery reduces the risk of such issues.
Unprotected batteries
The unprotected battery is the very opposite of the protected battery. It has no built-in electronic board and will deliver its power regardless.
That also means an unprotected battery on charge still with say 20% of its charge remaining, doesn’t know it has 20% of its power left. If you leave it to overcharge itself this process will cause the battery to overheat.
When you put an unprotected battery on charge, it effectively assumes it’s drained, which results in overcharging if it’s not drained. A process of overcharging because it wasn’t drained (unless you take it off charge!) will shorten the life of the battery dramatically, and is a very serious explosion and fire hazard.
The big advantage of an unprotected battery is that it gives the user lots of options with their kit, see link to article below.