An application environment is composed of multiple servers in different roles, such as web, application, and database. Scaled out versions of these environments could have multiple servers front-ended by load balancers and availability groups. While agents in agent pools give you a way to deploy your application, you are responsible for bringing together the agents in the agent pool to deploy to your environment.
In this model, you are responsible for managing the complexity of how the deployment impacts the environment, such as orchestrating the rotation of the web servers as they are being upgraded. In this model, it's hard to answer simple questions such as the version of the release deployed on a machine. Microsoft has significantly enhanced the machine groups feature that it first introduced in TFS 2015 and rebranded as deployment groups.
Simply put, deployment groups are a collection of agents collectively representing an application environment, such as...