The open-source version is the non-encoded version of the module/theme, you can use that file in multiple websites even on different domains. You are not required to renew the open-source version again and again as it is a one-time purchase.
Whereas, the Annual version is the yearly version of the module/theme license. It is only valid for one year after that you are required to renew the license every year. Moreover, the files of modules/themes are encoded too.
