By following our recommended configuration for Firefox, you’ll receive the most important benefits to privacy and security (i.e. enforcing HTTPS, sanitizing-on-close, and Strict ETP). Currently (and regardless of whether you use Arkenfox), we don’t recommend Librewolf.
In terms of the differences between Firefox and Librewolf, this comparison tool can give you an idea. Librewolf applies numerous further changes which improve security and benefit privacy (particularly by fooling naive fingerprinting scripts). We recommend the Arkenfox project for advanced users who are interested in further hardening.
I highly recommend reading this page of the Arkenfox wiki. It provides a great introduction to the benefits and drawbacks of further hardening (i.e. past our recommended configuration)!