That's explained here: https://cloud.google.com/appengine/docs/the-appengine-enviro... Most important difference; the app engine is fully managed by Google (so they do security updates etc), with Compute Engine you have to do it yourself.

As I understand, App Engine Flexible has automated (and customizable) health checks and configurable scaling (and probably some other services I'm forgetting) on top of "bare" computer engine VMs.