What is the difference between Hotmail account and Microsoft account in People App

Hi everyone,

I have configured the Mail app with my hotmail account. As you can see from the screenshot below, only 1 account is configured.

However, if I open the People app and create a new contact, I am being asked to save the contact to either Hotmail or Microsoft account.

If I select Hotmail, I can see the contact on https://outlook.live.com/,but if I select Microsoft account, I do not see the contact being sync with outlook.live.com.  Can anyone explain me where the contact goes when I select Microsoft account?

Thanks!