The difference between a user that is defined with a job status as former, compared to a user with the job status as archived, is that the archived user does not take up licenses. Whereas the users who are defined as former take up a user license and their data can be updated.
Please note that user's with a job status defined as 'Former', will be allocated team membership. Therefore when you delete a team, please make sure to delete the former members from that team, so that the team can be deleted correctly.
1. Former Employees example
2. Archived Employees example