These are my findings around Modern Sites without Office 365 Groups. It is, of course, a subject to change.

Today (2020-02-21) when you create a Modern Team Site without a group, you will get a site with the template STS#3. This oldie has been around for a while, hasn’t it?

I would always recommend creating Office 365 Group Connected sites.

How it is created

Through PowerShell/REST or from SharePoint Home, if your account is not allowed to create Office 365 Groups, it will automatically create a site without a group.

A non-admin user can create no more than 250 resources in Azure AD. That is one of the many Azure AD service limits and restrictions. A “resource” can be an app registration, an Office 365 Group etc. But I would like to discuss Groups more in detail.

Imagine the following scenario: Your organization has disabled Office 365 Group Creation. Only IT can create new groups. A service account has been set up for creation of team sites. The application permissions are “binary”, either everything or nothing: Group.ReadWrite.All. This service account will hit the limit very soon.