What is the difference between a Site Studio component and a Drupal custom block?

Drupal custom blocks are content entities which are referenced by a page. In contrast, Site Studio components are a template and content described in JSON.

When placed onto the Site Studio layout canvas field, components become the content for the field. There are no referenced content entities, only a template file for the component layout and styling.

The content entered into the component form is included in the layout canvas field as a JSON blob.

For more detailed information, see the Components area in the user guide.