Embedded datastore
Using an embedded datastore means leveraging a database that runs within the Kubernetes cluster, typically as a containerized service, e.g. etcd. This option simplifies deployment and could improve performance and security.
Embedded Etcd
Embedded Etcd is the default datastore. It is the only embedded option that allows to deploy RKE2 in HA mode. Unless explicitly unset, one etcd pod will be deployed per RKE2 server and all the etcd instances will maintain a quorum. Deployment includes tools to easily create snapshots when using this datastore as explained in the backup/restore.