As soon as an application consists of more than web pages, the question arises how an app or another system signs in. Sanctum is the answer Laravel ships for that. It issues access tokens, checks them on every request and can withdraw individual ones when a device goes missing.
The second use is your own interface. When the browser application and the interface belong to the same application, Sanctum carries on with the ordinary session instead of passing a token through on every call.
Why the smaller solution is usually the right one
The obvious alternative is called Passport and speaks OAuth 2.0 in full. That is the standard when outside providers are to be given access. It also brings a great deal with it that is never needed in the vast majority of projects, and every bit of it wants understanding and maintaining.
So the question is not “which is better” but “who is actually meant to sign in here”. For your own app and your own screens, Sanctum is the right size. We settle that at the beginning of an interface project; see API and backend development.