Im thinking the former is a canon character that exists but is an U version, whether fan made or canon.

and the later a fan made character from an au.

but then I got thinking, do I have it the wrong way around?

some places stipulate that canonAU means a canon non main universe setting, like what if marvel. And then some simply say its a canon character that exists in an AU regardless of if its fan create au or canon.

yeah. I wish we had a definition that dwrp generally used, or that places would lay it out more clearly, you know?

yeah, it would be great to have a dictionary for this XD

IT would be.

I thought it was a canonical alternate universe, like how some anime have extras with them in a high school setting or a modern one when the original is some fantastical or historical set show.

And a fan AU is an AU a fan made up, rather than an official AU... I dunno.