Use the normal outline for quick borders. Use SDF when the outline needs to stay smooth at different sizes.
Fast outline
Enable Outline, choose the color, set the width, and adjust softness. This is enough for most sprites.
SDF outline
Set outline style to SDF, assign or bake an SDF texture, then tune width and edge softness.
Bake the SDF after changing the sprite texture. Reuse the baked SDF texture for identical sprites.