By default the AXEoS settings have us connected to public-pool.io. I run a full node and understand the steps to download the public-pool.io app and change the AXEoS settings to point to my node. I’m trying to understand WHY and what is happening differently when I switch out of the default AXEoS settings - Is it that with the default settings, we are trusting/relying on public-pool.io’s node. Meaning if they decide to change the software their node is running, we will be mining with the ‘new’ consensus rules of their node. Whereas when I connect to my node I know what software I’m running. Is that what is meant by ‘making your own block headers’
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Your understanding is exactly correct. By mining to public-pool, you are using their node and block templates.
You can set up a Datum Gateway in “lotto” mode to effectively get the same results. Using your own node and block templates or you can set up your own public-pool instance that connects to your own node. sethforprivacy has good guide here.