Creating a new Chrome user is another quick way to create a new browser user profile. Learn how to add a new user in Chrome [N.B. which links to the page on multiple users]
What exactly are the differences and pros & cons of each, aside from how they're created?
Labnol seems to superficially cover the topic, implying in a March 2012 article there is a difference in password and browsing history storage. I've created a profile via Chrome's Settings mechanism, and a new directory was created in
%LOCALAPPDATA%\Google\Chrome\User Data\. That's exactly what Labnol instructs you to do the hard way. That new profile did not inherit anything from the Default profile. The history was empty, and there were no passwords stored. This suggests that the Labnol article is wrong. It instructs on to copy the Default profile directory, which will, of course, copy the history. Finally, the claim that "Unlike Firefox that ships with a Profile Manager, you can only manually create user profiles in Google Chrome.", is patently obsolete.
Furthermore, Chrome 26 created a shortcut on the desktop launching
chrome.exe with the
--profile-directory parameter, not with the
--user-data-dir suggested by Labnol. The latter, however, is documented by Chromium.