As far as modes, again I think you’ll see a lot of variation.
For me, modes are used when I want the same device to behave differently depending on different conditions.
I usually use the example of how our household distinguishes between Night and Asleep.
In night mode, we have some motion sensors that turn on ceiling lights.
In asleep mode, the same motion sensors do not turn on ceiling lights, but rather a soft night light.
Night mode is set automatically at sunset.
Asleep mode is set when I intentionally push the button to change my fitness tracker to sleep tracking mode.
But there are other households that use modes for much more complex distinctions.
Here’s one discussion, but you can find a lot more in the forums: