They are different.
"Chef Repo" is a collection of "code" - cookbooks, recipes, etc. This is your code base. To draw a parallel, this is the source code that you click on SCM (e.g. GitHub or BitBucket). If you are building a package, it will be a bunch of code.
A chef is, among other things, an artifact store. It contains the final, versioned artifacts (cookbooks) that are packaged from the Chef's Repo. If you are building a package, it will be .deb or .rpm .
Your sites will only contact Chef Server. Thus, the local development that you perform in Chef Mode is not applied until the artifact is packaged and uploaded to the chef's server.
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