Grade is not a quality judgement but a description of knots, sapwood and colour variation.
A lively but restrained floor. Knots occur, but the large and numerous ones are sorted out. The colour play is calm enough that the floor does not take over the room.
Here knots, sapwood and strong grain are part of the character. The floor gains personality and hides small marks in its pattern.
Both grades are produced to the same standard from the same timber. The difference is how much nature you want to see. Order samples of both — the difference is clearest in your hand.