Google Sheets - Parsed converts variables in your sheet into Google Sheets' proprietary language.
For example the word true becomes TRUE logical.
Google Sheets - Raw treats the word true as just another word.
Recommendation:
Experiment with both formats and check your Google Sheets to determine which format is best for your workflow.
Implications:
Dates, integers and booleans can be impacted by these format differences.
If you are treating Google Sheets simply as a connector conduit (a raw, simple data store) for a downstream dashboard/business intelligence application -you should try Raw.
If you are implementing custom formulas inside Google Sheets or using importrange, etc. you should try Parsed.
Additional reading: