It's more basic than "Commercial vs Hobby" even though the FAA has gone out of their way to portray it like this. The problem is many people do stuff with their UAS that really isn't business or commercial but it still falls under Part 107. Here's why.... (this is Copy/Pasted from another thread)
Ok I got some clarification. It seems some of the problem stems from our own misunderstanding of the regs and how they were intended. Part 107 does not mean strictly "Commercial Operations" even though everyone (even the FAA) associates Part 107 with Commercial Use. It's even noted as the "Commercial UAS Rules" by the FAA. Commercial Operations are but one portion of what Part 107 encompasses.
Part 107 technically "allows" for "civil" UAS operations. Part of that "civil" operation can certainly be commercial operations but doesn't exclude other flights that are not "Commercial". Therefore, if you are not in compliance with Part 101 and you're not on an Exemption or Public Use COA, you are operating as a civil UAS and Part 107 applies.
Here is a direct quote from him:
"Think of it this way: Everyone is a civil UAS operator, subject to Part 107 (Public Use excluded). Now, Congress mandated that certain operators be left alone (not subject to Part 107) if they are operating as a hobbyist and codified law to describe what a hobbyist operation must adhere to. The FAA took that law and regurgitated it into Part 101. So, if you're going to claim that you are NOT flying under Part 107, you must follow all of Part 101, or else you revert back to Part 107 regulations."
So with that guidance directly from our FAA Liaison I think it's pretty clear (at least from my stand point which may be slightly skewed) that you must fit completely inside the Hobby/Recreational (Part 101) box or you do indeed default back to Part 107 regulations.