This is how to look at it.
First you need to think of text and binary (bytes) as two distinct types.
The text most of the times is how you interact with user, so things that you will display to the user, or what user enters to you.
Now, the text is stored in unicode (how, it's not our concern, Python abstracts it from us), the bytes is representation how it's stored in files, send over a network etc.
Now if you need to store text in a file, or send over network you need to encode it (most of the time as UTF-8), if you receive data which supposed to be text you decode it. It might be helpful to think of a text as a sound and bytes as mp3. You encode sound as mp3 to store it in a file, and when you want to play it back you decode it.
There are some things can cause a confusion. For example if you write text to a file, python will automatically apply the conversion. Things like that are there so you don't have to do the conversion every single time.