Gargoyle One said:
There's ultimately no difference other then the range.
It's gone from time Stop to so incredibly slow it's a blitz 100x over
Internal magic (repeatedly suggested by the game saying witch time heightening senses and bringing emotional energy to the limit) would only affect Bayonetta.
External time slow would affect others, while Bayonetta remains at her normal speed. It wouldn't make much sense to slow down the time around you
and boost your stats to match this new perception if you're already capable of manipulating the degree of time that you slow down. There's hardly any solid evidence (if at all) for this outside of speculative gameplay.
Take Mayuri vs Szayelaporro, when Mayuri drugged him with a substance that increased his reactions by 100,000 times or whatever. He couldn't move at all, because his body was far behind his senses. This seems to be the case with witch time, except Bayonetta can boost her physical attributes to match her perceptions.
"As "Overseers of History," they possessed
the ability to literally see everything in an instant, also known as Temporal Control. This technique
sharpened all of the five senses, and pushed one's emotional energy to its very limits. It is a world where a falling drop of water can become a crown, and a humming-bird slowly and elegantly flaps its wings. Temporal Control is not just simply
being able to recognize this world, it also enables one to boost their physical abilities and move freely within that single moment.(edited)"
Just because we see the world around Bayonetta isn't evidence that her ability affects the world. Her ability increases her stats while increasing her perceptions so that she's capable of viewing the world with insane detail. As the gamer, we are seeing everything from Bayonetta's eyes during witch time.
Honestly, this sounds more insane perceptions/enhanced senses, but the only saving grace here is the term "temporal control". I honestly don't see how time manipulation boosts one's physical attributes and sharpens their senses, but I'll go with the most sensible and supported answer.