One is your ROOT rfactor 2 directory.... the other is where you want to install your mods from (you can add multiple of these and select whichever one you need at the time).
Sorry, but that isn't exact. OK, the Working dir is the root dir of rF2 The Packages dir is the folder to put your packages (rfcmp and rfmod) It's not the folder where the content is going to be installed. It's the folder that the Mod manager (and the UI) are going to look for the content, to install it in the game (..\rFactor 2\Installed)
@lagg the key word in what Woodee said is from. That makes it the same as what you said. However, if you didn't see it maybe others won't too, so now it's definitely clear
