In AWS cloudformation, what is the difference between a custom resource and a resource provider?

Question

As per my understanding:

• A custom resource is just an AWS Lambda function that runs whenever the stack is provisioned or updated or deleted.

• A resource provider is plain old code where one writes hooks for all the Stack operations (update, create, delete, etc).

I can't see why anyone would use the former over the latter. Resource providers seem easier to write and test.

Answer 1

One historical reason is that custom resources were the only option until recently:

CloudFormation Release History

Nov 2019 Resource Provider announcement