I've read about the difference between iambic mode A (completes current element when paddles released) vs mode B (sends additional opposite element when paddles released) but I'm struggling to understand when this really makes a practical difference.

For example, when sending 'C' (-.-.), in mode A you squeeze both paddles and release after the last dit, but in mode B you must release after the second dash. Are there specific letters or situations where one mode clearly works better? Most operators seem to prefer mode B - why is that?

Mode B is definitely preferred by most serious CW ops because it gives you more control over timing. The iambic mode allows you to slip a dit between two dahs or a dah between two dits, and mode B makes this much more predictable once you get the hang of the squeeze timing.

I actually use Mode A and have never felt limited by it! Some argue the advantage of iambic keying isn't really worth the bother of learning. For contest work, I find the simpler Mode A timing easier to predict under pressure. Really depends on your sending style and what feels natural.

As a newer CW operator, I found Mode B confusing at first but it's definitely worth learning. Take it slow, practice slow, until your wrist and fingers develop the habit and you feel the rhythm of each letter rather than counting dits and dahs. The mode becomes less important once you develop that muscle memory.