Weight loss refers to a decrease in your overall body weight from muscle, fat, and water loss.
If simply put: Weight loss = Water + muscles + glycogen + fat
Whereas, Fat loss refers to weight loss from fat, and it’s a more specific and health-oriented goal than weight loss since it focuses on losing weight while maintaining muscle mass, which allows you to look more toned.
So, if simply put: Fat loss = Reduction or burning of stored body fat.
Now why is fat loss more important than just weight loss?
Because losing muscle mass can be detrimental, as muscle is a crucial component of your overall health.
Maintaining a healthy percentage of muscle has several benefits, such as

regulating healthy blood sugar levels

maintaining healthy fat levels — like triglycerides and cholesterol — in the blood and

controlling inflammation.
Additionally, the more muscle you have, the more calories you burn at rest.
How do we assess fat loss?

By measuring inches or centimeters lost from your waist/chest and hips.

noting any changes in how your clothes fit and

taking your physique updates very seriously
Losing weight in the form of fat rather than muscle should be the priority given how important your fat-to-muscle ratio is to your overall health.
You can prioritize fat loss by eating plenty of protein, prioritizing strength/ resistance training, moderately restricting your calories while maintaining proper nutrition.