From what I understand, a PackedScene is the entire scene stored in memory and/or on the file system. You cannot directly edit in code PackedScene, and so you need to instance it to turn it into a normal Scene. Once the PackedScene is a normal Scene, you can edit, change, or do whatever you need to it like normal.
Where you mainly interact and use PackedScene objects is when you use Load("path_to_scene.tscn") or preload("path_to_scene.tscn"), as both of these return PackedScene objects when loading scene files. That is why you have to do something like this: add_child(load("path_to_scene").instance()) to add a different scene into another from code.
(You can also exported PackedScene's if you want to set them from the editor: exported(PackedScene) var scene_file. This works similar to load, but instead of putting in the resource path, you can select the scene you want to load from the editor)
As far as I know, PackedScene objects are pretty much used exclusively for saving/loading scene files to and from memory and the file system. Personally I have not really used PackedScene, at least not directly. I think I have only used it once and that was to in a exported variable, but in the couple years or so I have used Godot I cannot really remember using it that much outside of load and preload.
Hopefully this helps :smile:
