Q: When should a referee signal one or the other? What are the subtle differences between both calls? What constitutes illegal use vs illegal contact?

A: There is an illegal use of hands signal. This is applied after a foul where there is contact by the defense using the hands by making illegal contact with an opponent which could include making contact with the hand on some part of their opponents body, excluding the hand. The "illegal contact" you are referring to is actually "Illegal Contact to the Hand," which is what I think you are referring to. This is applied after a foul where there is contact by the defense using the hands making illegal contact with an opponent by making contact with the hand on the opponents hand, which could include making contact to the opponents hand while it is in contact with the ball on a shot or while dribbling, as an example. There is no foul or signal for anything called "illegal contact," as you ask.
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