When to choose development of a PowerShell Module over PowerShell Script

To understand what modules can do for you, read this: https://docs.microsoft.com/en-us/powershell/scripting/developer/module/writing-a-windows-powershell-module?view=powershell-7.1

In a nutshell,

Windows PowerShell modules allow you to partition, organize, and abstract your Windows PowerShell code into self-contained, reusable units. With these reusable units, administrators, script developers, and cmdlet developers can easily share their modules directly with others. Script developers can also repackage third-party modules to create custom script-based applications. Modules, similar to modules in other scripting languages such as Perl and Python, enable production-ready scripting solutions that use reusable, redistributable components, with the added benefit of enabling you to repackage and abstract multiple components to create custom solutions.

If your script already has functions and is not just written to perform a single task, you can just rename it to .PSM1 to convert it to module. If you are not using functions, of course, there is no choice but to go for .ps1. In such a case, each .ps1 will be used to perform a single task. I always prefer modules when sharing the scripts I write with others.

I like modules for the ability to "hide" functions/variables and only export the ones that I want.