some windows server concepts
As soon as a Server becomes a Domain Controller, its local accounts are gone. Only domain accounts are to use on those for logon.
Every other computer/server you add to the domain that don't get promoted to a DC keep their local accounts as well as domain accounts, as long as they are connected to the domains network.
It's quite funny but there are some products that you need to install with a local account and won't get installed with a domain account. But this is just a sidenote
As for when to use the fqdn or the domain short form to logon. Usually the short form is enough for systems nowadays (win 2003 upwards) but some times I can't say why the short form won't work and you need to enter the fqdn. To create a trust you should use the FQDN when establishing it across the domains. I had several "issues" where it was said use the fqdn and the short form was working as well, and some cases where the short form needed to be used, but only the fqdn did work.
To just logon you can use the short form\username or just pick the ressource to logon from the dropdown if the logon screen is configured to have one.
A workgroup is a bunch of local computers/servers that all only have their local accounts but see each other in the network. If you want to login to a machine, you will always need the local accounts then and can't logon with a user from machine A onto machine B. Now you might say but I can logon as admin on all systems. Yes but that is always the local admin from the machine you logon to.
I have a workgroup here at home. called it cave. Now in the network enviroment I can open up the workgroup and see all online machines inside. But you won't have any domain features with it. It's from my point of view just an option to cluster network ressources in groups to easier find them.

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