I.e. the bottom line: to muffle the sound of a shot on a planet with an atmosphere, outside of buildings.
One mod is enough - audio masking.
Audio masking just works in the absence of natural sound being carried and natural sound doesn't carry
enough in a tenuous atmosphere and so is simulated by our suits anyway. You can safely assume that "outside a building = audio masking safe" irrespective of where you are, yes.
In terms of remembering which does which and why they work differently, it might help you to know some lore/game design history that lead directly to this even being a thing.
Sound doesn't carry in a vacuum and, early on in the game's development (pre-alpha), FD decided that having a space game with almost no sound would be dull and nowhere near as atmospheric (ha ha) as one with sound. Apparently, they tried it without sound and decided it just wasn't worth the "realism". What they did to "explain away" or "hand wave" the fact that we can indeed hear all the sounds around our space ships was that they're all fitted with a device that simulates sounds based on events occurring in range and then relays that directly to our commander via speakers. When on foot, the same sound simulation is carried out by our suits for the exact same reason (game play reason and "hand wave" reason). In reality, we'd not hear anything in a vacuum and our ability to hear anything in a tenuous atmosphere would be severely impaired. If FD decided to go down the route of retaining "realism" instead of fun, they'd have zero need to give us a silencer mod for our weapons except for when inside a pressurised building.
So... The silencer we get by default is called a noise suppressor, which is what it is doing and you can quite easily relate noise suppression with what a silencer actually does.
However, the audio masking device we get to stop others "hearing" our weapon fire is actually a chip that
masks the signal created by our weapons when they fire that
other suits would normally detect as part of their "hand waved" device to detect sound. This is why bullet/projectile impacts (if you shoot a wall, for example) are never dampened in any way and are always fully detectable if an NPC is near enough; that sound is never masked nor is it suppressed. But, when your weapon fires, if it has the audio masking mod, it'll subvert the "hand waved" pretend device all weapons have that normally transmit their audio information to anything in range that can detect it.
It's basically a transponder hack but for weapons. And the way to know the difference is it literally tells you that it is masking its audio [signal]. As opposed to suppressing the noise it makes.
I do use both on any weapon designed for stealth killing but I think audio masking is the only one you really need. Using the energy link to quietly kill indoors is pretty easy for massacre/assassination missions and scavengers never go indoors but when you're outside there's usually a lot less cover and it's more useful to be able to silently kill non-shielded targets from a distance. Noise suppressor is a nice-to-have. Audio masking is hugely useful though if you want to kill softer targets without getting detected, but you still need to do enough damage to kill them before they put up their shields, otherwise the benefit is lost anyway. For this reason, I think audio masking is less useful for some automatic weaponry.
There are some comments above discussing the usefulness of these mods in CZs and I'll always say that you should use whatever mods you want to use because, largely, the only thing that actually matters in EDO is the grade of the weapon anyway but... I'd much prefer to use mods that give you QoL in combat than a silencer... Every target has a shield (one shot stealth kills are not a thing) and will always react when shot and it's very rare any other NPC will react to you shooting them if you're far enough away, so you're not gaining any benefit from being silenced (I believe it possible to shoot at a bunch of NPCs and only the one you shoot with react to you anyway). I prefer extended magazine, faster handling, stowed reloading (this one is amazing in CZs, resulting in hardly ever needing to reload) and then any other mod dependent on the weapon (usually improved hip fire accuracy).
But for scavenger killing and massacres, audio masking helps so much, particularly on the Executioner. Without it, you're almost guaranteed to have to engage shielded enemies. With it, you can take out the whole settlement and never get detected.