what is the difference between how df.exe behaves when drive defragging vs individual file defragging:

df c:
df c:\ /s

The difference I would presume is one would defrag the whole drive and the other would defrag individual files -> I know just stating the obvious, but didn't quite understand the question either.

As for the examples you have quotes, both would do the same since drives are special cases. Instead, if you used something like
df c:\windows -> This would defrag the files under this folder alone
df c:\windows /s -> This would defrag files and folders under the directory recursively