The difference between storing sensitive data in protected custom objects and protected custom metadata types lies in their use cases and implementation:
1. **Protected Custom Metadata Types**:
- **Best for**: Secure, metadata-driven configurations in managed packages.
- **Security**: Secrets are securely stored and not accessible or modifiable by subscribers or untrusted code.
- **Use Case**: Ideal for configurations packaged with the application.
2. **Protected Custom Objects**:
- **Best for**: Storing sensitive data that needs to be accessed dynamically.
- **Security**: Requires encryption of the data, with the encryption key stored separately (e.g., in a protected custom setting or hidden custom metadata API field).
- **Implementation**: Needs additional setup to ensure encryption and access control.
In summary, use protected custom metadata types for secure, static configurations and protected custom objects with encryption for dynamic, sensitive data storage.