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.