Great question: if you Mastodon and Pixelfed accounts can just follow each other, how is a Pixelfed account different from a Mastodon account?

The difference is in media. If you follow Mastodon accounts from Pixelfed, you will not see text-only posts on Pixelfed. And if you follow Pixelfed accounts on Mastodon, you will typically see text before you see photos.

So really, the difference is primarily about design and how you wish t interact with the Fediverse.