A Snapshot is similar to a branch, except that it automatically pins the folder that gets created. Before version 2.0, snapshots were called labels. Version 2.0 of Vault implemented Labels as tags on a folder rather than separate entries in the tree. Snapshots are equivalent to Version 1.0 labels.
Snapshots vary from branches in the following ways:
Snapshots are only available on folders
A snapshot folder is clear rather than blue.
Snapshots are automatically pinned after they are created.
You can hide snapshot folders from your tree unchecking the Show snapshots in folder tree option in Tools->Options.
If you do a recursive Get Latest operation above a snapshot, it will not retrieve the snapshot. Snapshots are only retrieved if you do the Get on the snapshot itself.
If a folder is shared, doing a snapshot on the shared folder will create a snapshot, not break the share. (If you were to branch a shared folder, it would break the share. This is not the case for a snapshot).
You cannot cloak a snapshot folder, because they already act as a cloaked folder would.
It is recommended that you use branches or labels to mark a version of a tree. Snapshots are simply a historical oddity.