It's both the interface and the backend, but the backends still share ActivityPub compatibility, so they can still federate together. Kbin/mbin are also different software but similarly are able to federate with Lemmy (and the rest of the fediverse) via ActivityPub.
As both projects continue to develop, there could emerge significant differences in functionality, but it's far too early to know.
Some differences are listed here https://join.piefed.social/features/. It goes way beyond those, that list is just some user-facing features that everyone will be able to easily understand.