Difference between textsc{ciao} and text{scshape ciao}

Two differences:

1. the text construction in text mode is the same as mbox, so its argument cannot be split across lines or hyphenated;
2. no italic correction is added at the end.

Of course, there's no difference in math mode. Indeed, a command such as textsc{...} in math mode becomes text{scshape ...}.

Speaking of text mode, the first outlined difference might be what you're actually looking for, but in that case why not using mbox directly?

About the latter outlined difference, it doesn't really show with small caps, but the similar situation with italics should be considered

documentclass{article}
usepackage{amsmath}

begin{document}

text{itshape if} test

textit{if} test

end{document}

Perhaps less impressive, but important, with bfseries and textbf you get