With public, there are no restrictions and any site may embed the image.

The restricted setting will only allow whitelisted websites to embed the image. Any websites listed in your global whitelist will automatically be allowed. If you’d like to add more websites to a specific image, you may do so on the edit image page.

It’s important to note that anyone can view your images in your profile exif.co. These options only restrict who may embed an image directly on their website.