When you substitute powdered sugar for granulated sugar, you're essentially changing the texture and density of the sugar. Powdered sugar is much finer and more dense than granulated sugar, which means it can make your baked goods more tender and delicate. But, it can also make them more prone to sinking or collapsing, if you're not careful.
Think of it like the difference between sand and flour. Both are fine powders, but they have different textures and uses. Powdered sugar is like the flour of the sugar world, it's fine and delicate, while granulated sugar is like the sand, it's coarser and more textured. So, when you substitute one for the other, you need to be aware of the potential consequences.
For example, if you're making a cake or cookies, using powdered sugar instead of granulated sugar can result in a more tender and delicate texture. But, if you're making a yeast-based dough, like bread or pastries, using powdered sugar can inhibit the yeast's ability to ferment, and affect the rise of the dough.