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Routed Mode:

This mode is the default mode of operation

This mode is generally also the default gateway for devices on the LAN

Client traffic to the internet has the source IP rewritten to match the WAN IP of the appliance

DHCP services can be configured on the MX appliance

Passthrough Mode:

The MX appliance acts as a layer 2 bridge

VLANs cannot be configured

No address translation is provided

This mode is not recommended at the network perimeter

This question is related to the topic of MX Addressing and VLANs in the Cisco Meraki documentation. You can find more information about this topic in the MX Addressing and VLANs article or the General MX Best Practices page.