Śrīla Vyāsadeva makes a clear distinction between the two in this śloka. Śrī Vyāsadeva says herein that the manifested internal potency is real, whereas the external manifested energy in the form of material existence is only temporary and illusory like the mirage in the desert. In the desert mirage there is no actual water. There is only the appearance of water. Real water is somewhere else. The manifested cosmic creation appears as reality. But reality, of which this is but a shadow, is in the spiritual world. Absolute Truth is in the spiritual sky, not the material sky. In the material sky everything is relative truth. That is to say, one truth depends on something else. This cosmic creation results from interaction of the three modes of nature, and the temporary manifestations are so created as to present an illusion of reality to the bewildered mind of the conditioned soul, who appears in so many species of life, including the higher demigods, like Brahmā, Indra, Candra, and so on. In actuality, there is no reality in the manifested world. There appears to be reality, however, because of the true reality which exists in the spiritual world, where the Personality of Godhead eternally exists with His transcendental paraphernalia.
(Srimad Bhagavatam-----1:1:1------purport).

Śrīla Viśvanātha Cakravartī Ṭhākura specifically deals with the original and pure sex psychology (ādi-rasa), devoid of all mundane inebriety. The whole material creation is moving under the principle of sex life. In modern civilization, sex life is the focal point for all activities. Wherever one turns his face, he sees sex life predominant. Therefore, sex life is not unreal. Its reality is experienced in the spiritual world. The material sex life is but a perverted reflection of the original fact. The original fact is in the Absolute Truth, and thus the Absolute Truth cannot be impersonal. It is not possible to be impersonal and contain pure sex life. Consequently, the impersonalist philosophers have given indirect impetus to the abominable mundane sex life because they have overstressed the impersonality of the ultimate truth. Consequently, man without information of the actual spiritual form of sex has accepted perverted material sex life as the all in all. There is a distinction between sex life in the diseased material condition and spiritual sex life.
(Srimad Bhagavatam-----1:1:1------purport).

Those who are not conversant with the activities of the Lord and His transcendental realm are sometimes favored by the Lord in His adventures as incarnations wherein He displays the eternal bliss of His association in the transcendental realm. By such activities He attracts the conditioned souls of the material world. Some of these conditioned souls are engaged in the false enjoyment of material senses and others in simply negating their real life in the spiritual world. These less intelligent persons are known as karmīs, or fruitive workers, and jñānīs, or dry mental speculators. But above these two classes of men is the transcendentalist known as sātvata, or the devotee, who is busy neither with rampant material activity nor with material speculation. He is engaged in the positive service of the Lord, and thereby he derives the highest spiritual benefit unknown to the karmīs and jñānīs.
(Srimad Bhagavatam-----1:1:17------purport).

Bhīṣmadeva is one of the twelve mahājanas who know the principles of transcendental knowledge. His confirmation of Lord Śrī Kṛṣṇa's being the original Personality of Godhead is also corroborated by the impersonalist Śaṅkara. All other ācāryas have also confirmed this statement, and thus there is no chance of not accepting Lord Śrī Kṛṣṇa as the original Personality of Godhead. Bhīṣmadeva says that He is the first Nārāyaṇa. This is also confirmed by Brahmājī in the Bhāgavatam (10.14.14). Kṛṣṇa is the first Nārāyaṇa. In the spiritual world(Vaikuṇṭha) there are unlimited numbers of Nārāyaṇas, who are all the same Personality of Godhead and are considered to be the plenary expansions of the original Personality of Godhead, Śrī Kṛṣṇa. The first form of the Lord Śrī Kṛṣṇa first expands Himself as the form of Baladeva, and Baladeva expands in so many other forms, such as Saṅkarṣaṇa, Pradyumna, Aniruddha, Vāsudeva, Nārāyaṇa, Puruṣa, Rāma and Nṛsiṁha. All these expansions are one and the same viṣṇu-tattva, and Śrī Kṛṣṇa is the original source of all the plenary expansions. He is therefore the direct Personality of Godhead. He is the creator of the material world, and He is the predominating Deity known as Nārāyaṇa in all the Vaikuṇṭha planets. Therefore, His movements amongst human beings is another sort of bewilderment. The Lord therefore says in the Bhagavad-gītā that foolish persons consider Him to be one of the human beings without knowing the intricacies of His movements.
(Srimad Bhagavatam-----1:9:18------purport).

Every living being, either in this material world or in the spiritual world, is under the control of the Supreme Lord, the Personality of Godhead. Beginning from Brahmājī, the leader of this universe, down to the insignificant ant, all are abiding by the order of the Supreme Lord. Thus the constitutional position of the living being is subordination under the control of the Lord. The foolish living being, especially man, artificially rebels against the law of the Supreme and thus becomes chastised as an asura, or lawbreaker. A living being is placed in a particular position by the order of the Supreme Lord, and he is again shifted from that place by the order of the Supreme Lord or His authorized agents. Brahmā, Śiva, Indra, Candra, Mahārāja Yudhiṣṭhira or, in modern history, Napoleon, Akbar, Alexander, Gandhi, Shubhash and Nehru all are servants of the Lord, and they are placed in and removed from their respective positions by the supreme will of the Lord. None of them is independent.
(Srimad Bhagavatam-----1:13:41------purport).

The jīva-tattvas are infinitesimal potential particles of the Lord, and therefore they require the protection of the Lord at all times. And to the eternal servitors of the Lord, the Lord is pleased to give all protection at all times. The liberated souls never, therefore, think themselves as free as the Lord or as powerful as the Lord, but they always seek the protection of the Lord in all circumstances, both in the material world and in the spiritual world. This dependence of the liberated soul is constitutional, for the liberated souls are like sparks of a fire that are able to exhibit the glow of fire along with the fire and not independently. Independently the glow of the sparks is extinguished, although the quality of fire or the glowing is there. Thus those who give up the protection of the Lord and become so-called lords themselves, out of spiritual ignorance, come back again to this material world, even after prolonged tapasya of the severest type. That is the verdict of all Vedic literature.
(Srimad Bhagavatam-----1:14:32-33------purport).

The creative material energy is working under His direction, as confirmed in the Bhagavad-gītā (9.10). He is the control switch of the material energy, and to control the material energy in the innumerable universes, He is the root cause of innumerable incarnations in all the universes. There are more than five hundred thousand incarnations of Manu in only one universe, besides other incarnations in different universes. In the spiritual world, however, beyond the mahat-tattva, there is no question of incarnations, but there are plenary expansions of the Lord in different Vaikuṇṭhas. The planets in the spiritual sky are at least three times the number of those within the innumerable universes in the mahat-tattva. And all the Nārāyaṇa forms of the Lord are but expansions of His Vāsudeva feature, and thus He is Vāsudeva, Nārāyaṇa and Kṛṣṇa simultaneously. He is śrī-kṛṣṇa govinda hare murāre, he nātha nārāyaṇa vāsudeva, all in one. His qualities, therefore, cannot be counted by anyone, however great one may be.
(Srimad Bhagavatam-----1:16:26-30------purport).

When one becomes frustrated with all kinds of material advancement, one desires the opposite type of liberation, which is called apunar-bhava, or no rebirth. But the pure devotees of the Lord do not aspire after the happiness obtained in the heavenly kingdom, nor do they aspire after liberation from material bondage. In other words, for the pure devotees of the Lord the material pleasures obtainable in the heavenly planets are like phantasmagoria, and because they are already liberated from all material conceptions of pleasure and distress, they are factually liberated even in the material world. This means that the pure devotees of the Lord are engaged in a transcendental existence, namely in the loving service of the Lord, both in the material world and in the spiritual world. As a government servant is always the same, either in the office or at home or at any place, so a devotee has nothing to do with anything material, for he is exclusively engaged in the transcendental service of the Lord.
(Srimad Bhagavatam-----1:18:13------purport).

This intuition of the living being is sometimes manifested even during the conditioned stage of a living being in the material world, and such intuition is expressed in the manner of altruism, philanthropy, socialism, communism, etc., by the undeveloped minds of less intelligent persons. In the mundane field such an outlook of doing good to others in the form of society, community, family, country or humanity is a partial manifestation of the same original feeling in which a pure living entity feels happiness by the happiness of the Supreme Lord. Such superb feelings were exhibited by the damsels of Vrajabhūmi for the happiness of the Lord. The gopīs loved the Lord without any return, and this is the perfect exhibition of the akāmaḥ spirit. Kāma spirit, or the desire for one's own satisfaction, is fully exhibited in the material world, whereas the spirit of akāmaḥ is fully exhibited in the spiritual world.
(Srimad Bhagavatam-----2:3:10------purport).

The living entity who enjoys the interaction of the above gross and subtle ingredients, as set up by eternal time, is an offshoot of internal potency, with freedom to remain either in the material world or in the spiritual world. In the material world the living entity is enticed by deluding nescience, but in the spiritual world he is in the normal condition of spiritual existence without any delusion. The living entity is known as the marginal potency of the Lord. But in all circumstances, neither the material ingredients nor the spiritual parts and parcels are independent of the Personality of Godhead Vāsudeva, for all things, whether products of the external, internal or marginal potencies of the Lord, are simply displays of the same effulgence of the Lord, just as light, heat and smoke are displays of fire. None of them are separate from the fire—all of them combine together to be called fire; similarly, all phenomenal manifestations, as well as the effulgence of the body of Vāsudeva, are His impersonal features, whereas He eternally exists in His transcendental form called sac-cid-ānanda-vigrahaḥ (Bs. 5.1), distinct from all conceptions of the material ingredients mentioned above.
(Srimad Bhagavatam-----2:5:14------purport).