This article explains each BFD session type

There are four types of BFD sessions that are based on the source from which BFD packets are sent to the neighbors.

The different types of BFD sessions are

1) Centralized (or non-distributed) BFD → BFD sessions run completely on the Routing Engine.

2) Distributed BFD → BFD sessions run completely on the FPC CPU.

3) Inline BFD → BFD sessions run on the FPC software

4) Hardware-assisted inline BFD → BFD sessions run on the ASIC firmware