Ctrl+L vs Level Adjustment layer

I think the OP's question here is about the difference between applying a direct adjustment on a smart object vs. using adjustment layers.

And the interesting thing about that is that there isn't any, not functionally. They are both fully re-editable, but the interface and layer structure is very different. I can see why that might be a bit confusing.

The answer is probably just the quirks of history. Photoshop is a work in progress, and new features bring new ways to do things. Original functions, however, don't get removed, like direct pixel adjustments (ctrl+L etc). There's always someone still using it. And then it found new use with smart objects.

A hint- Modify your Keyboard shortcuts. [Alt+Shift+Ctrl+K] 

eg.  Change the [Ctrl+L] shortcut to create a new Levels Adjustment Layer.

1) First remove the default [Ctrl+L] shortcut in 'Adjustments>':  (Select & delete)

2) Add the [Ctrl+L]  (simply press the shortcut keys) in 'New Adjustment Layer>'

I illustrate the same change for Curves [Ctrl+M]

Actually they do the same thing, and they are both re-adjustable (sometimes called "non-destructive"). That's the important thing.

The "standard" way nowadays is of course to use adjustment layers. There's very little reason to use the old non-reversible direct pixel adjustments any more.

However, when used on a Smart Object, a direct pixel adjustment applies like a Smart Filter you can go back to. That's a nifty little trick - although for most practical purposes, a clipped adjustment layer will do the same thing. A matter of taste, I suppose.