The external sharing features of SharePoint Online let users in your organization share content with people outside the organization (such as partners, vendors, clients, or customers). You can also use external sharing to share between licensed users on multiple Office 365 subscriptions if your organization has more than one subscription.
SharePoint Online has external sharing settings at both the organization level and the site level (previously called the "site collection" level). To allow external sharing on any site, you must allow it at the organization level. You can then restrict external sharing for other sites. If a site's external sharing option and the organization-level sharing option don't match, the most restrictive value will always be applied.
Whichever option you choose at the organization or site level, the more restrictive functionality is still available. For example, if you choose to allow sharing using "Anyone" links (previously called "shareable" links or "anonymous access" links), users can still share with guests who sign in, and with internal users.
Kindly have a look at the below links to more about external sharing,
External sharing overview
Secure external sharing recipient experience
External Sharing in SharePoint Online: Key Facts & Best Practices
The ultimate guide to Office 365 external sharing