1) Update distribution points increments the package version, goes to the source location, constructs new package content but only sends the delta between what is already present on the DP and what is currently in the new package source. Also this action is package specific and once you trigger this action all the DPs to which the package has been distributed will get the new version.
this option best when all DP’s are in local
2) Refresh distribution points does not increment the package version but simply sends out the current version of the package content again to a specific DP. So this is action is specific to a package-DP association and should be used when the content on any particular DP appears corrupted.
Impact of enabling BDR:
1) For Update Distribution Points: Consider the scenario where one (or potentially several) files in the package source has been updated/modified. Enabling BDR would trigger distribution manager to do a diff between the current version of the file and the new version of the file and only send the delta changes within the file. On the receiving side we will then perform a BDR merge for that delta. So in the BDR case we may end up sending lesser data than in the scenario where BDR is not enabled on the package.
2) For Refresh Distribution Points: BDR setting has no affect - we simply send the entire current version of the package.