I've experimented with my own bluetooth headset and here's my results:
- the "Stereo" device is the main high-quality playback device of the headset, while the "hands-free" device is a lower quality monophonic playback device
- Attempting to capture audio from the bluetooth microphone (which is also labeled "hands-free") disables the main playback device, but not the hands-free playback device.
- By having one application play audio from one playback device and another application playing from the other, the hands-free device also disables the main device.
My conclusion is that the hands-free devices is inteded to be used when there's a two-way audio communication happening, but otherwise, use the main playback device. What I still don't understand is why the main audio playback device is being disabled when the hands-free devices are being used. Couldn't they both be on at the same time? That's when I hit a wall.
If you're woundering about things like teamspeak, discord, skype, etc. and why you are unable to hear other applications when you join a call or a voice chat, it's because these communication applications enable the hands-free devices, which in turn disables the main devices playing back other applications' audio. To solve this, you can use an external microphone, like the built-in one, or you can switch to the lower quality hands-free playback device. You can change all this from the "Sound" settings on Windows.