The confusion is reasonable though -- your description above is exactly how I use Firefox Profiles today (and for many years).
What does Containers add? If the only answer is "a more convenient UI", then that's good enough for me!
What does Containers add? If the only answer is "a more convenient UI", then that's good enough for me!
Sometimes that's what you want, and profiles certainly aren't going anywhere. But the idea behind Containers is just that you can be logged in to separate accounts simultaneously in multiple containers.
In practice, that means a better and more convenient UI. Containers work on a per-tab basis, so you can have multiple tabs logged in to the same account right next to each other, instead of in different Firefox processes. Plus, you can right click on a link and select "Open in New Container Tab".
So while Containers are more than a UI on top of Profiles, it practice one of the main advantages is the convenience of the UI.
It's more similar to a private browsing session, except things aren't forgotten, and you can have as many as you like. And they're tab level so you can treat them they same way you would a tab.
Other way around. Profiles retain configuration and extensions between sessions.
Containers: Use the same configuration and extensions across different containers in one running Firefox instance.
Both retain configuration and extensions between traditional browser sessions (start/stop). Containers additionally "retain" configuration and extensions across contextual sessions/identities.