Same question, same answer.
In principle they are based on this theory but may be different depending on implementation by different brands and instruments:
It should depend on that you have some modulation to demodulate and your filters are set so there are some signal left to work on basically.
From start the rectification suppressed the noise from cavitation so you could find bearing faults in cavitating pumps since those are mostly extinct by
using VFD it is more used as a scaling tool to enhance bearing fault freq. range that otherwise may be lost in the forrest of peaks and to trend bearing focused problems
or other peaks that pop up in the selected freq. range, but that is only my view.
Maybe formally Env. is a special case of Demod but I am not sure it is used that way in every day discussion I am lazy enough to use the terms as the same but likely I should not not but they behave similar to me.