Wherever possible, you should use a direct function reference as it is much more efficient. Using a string requires the browser to create a new script environment so it can process the script.
If you create a timeout, the code after the call to setTimeout will continue to run as normal. After the specified delay, the timeout will start a new thread, and the code specified in the call to setTimeout will be run in the new thread, along side any code that is still running in the initial thread. Unlike with many more complex languages, JavaScript does not offer any way to control when those threads sleep, wake, or yield. The JavaScript engine handles all of that, and you must accept that your new thread could be executing at any time next to another thread. Many JavaScript engines will simply allow one thread to complete before allowing the other thread to start. The same applies to events, which run in their own threads, and can be triggered at any time.
To pass variables to a timeout, you can use either format. To use a string, it is necessary to make sure the variables you want to pass can be represented in one of the primitive data types, and do not contain any characters that will break the string format (such as quotes). If possible, you should avoid this format, but this is an example, just in case you need to:
