The first one is for locally installed packages for a particular Emacs version; the second is for locally installed packages meant for use with all installed Emacs versions.
There are several reasons why a Lisp package that works well in one Emacs version can cause trouble in another. Sometimes packages need updating for incompatible changes in Emacs; sometimes they depend on undocumented internal Emacs data that can change without notice; sometimes a newer Emacs version incorporates a version of the package, and should be used only with that version.