SBV is understood mainly by YouTube and a few caption tools. VTT is what web video players and browsers display natively. SBV is at home in uploading and downloading YouTube captions; VTT is the usual choice for captions on web pages and in HTML video players.
The text is read as UTF-8 or UTF-16, whichever the file is. An older file in another code page is read using the charset it declares, or as Windows-1252 if it declares none, so accented letters in an unlabelled legacy file can come out wrong. A file that is not text, such as the picture-based subtitles of a DVD, is refused instead of being converted to nonsense. Of the styling, only italic, bold, underline and the position on screen (top, middle or bottom, left, centre or right) travel between formats; fonts, colours, outlines and effects do not. Top and middle positions and left or right alignment are written as WebVTT cue settings.