My take: in normal use the brake pads are not used much. You apply the "brakes", and it's mostly regen that's happening. The only time the brake pads are used seriously is on extremely long descents, long enough that the hybrid battery is charged to the point that the car refuses to charge it further, switches to full time brake pad use, and you still have a goodly stretch of downill in front of you. This does not happen in day to day driving for most people. I would reserve for coming down Mount Seymour, or Mount Baker, or similar.
True, but the OP started out with "when I let off the accelerator" and "does it do anything differently than if you were to apply brake pressure while in D?"
Yes, I wasn't aware of just how it operated so in my application B is not at all useful. I will keep it in reserve in case I ever make a long trip including mountains and will stick with the brake pedal here to increase the amount of regen.
As far as why B would run the engine more when not engine braking, I suspect catalytic converter temperature is the concern. Spinning the engine dry will blow cold air through the catalytic converter, which will then make it less effective when the ICE needs to run for propulsion.
I don't know why there seems to be a subconscious desire among some people to complicate when/how to use "B". D is "Normal Driving"...that's going to cover it for 99.9% about 99% of the time. B is recommended for down hill/steep descents. I never used "B" to "downshift"...The Prius is not a manual transmission. I never used "B" in any normal driving conditions. I used "B" as presented in the Toyota Prius Owners Manual. Nothing more, nothing less.
I have yet to use B. Most steep descents I take are on the highway. Can coast for the most part. If needed, slightly modulate the brakes for Regen.
Like it says in the manual, B mode means engine braking. It's mainly designed for going down long hills. I used it yesterday coming back from the Shenandoah mountains. It is a little odd to hear the engine groan, but it's better than burning up your brake pads. Also the brakes will be less effective when they're real hot, right after you take a long hill holding the brakes. I've also read one or two people recommend B mode for driving in the snow. I haven't tried that too much.
I would not recommend B mode for driving in the snow. In situations on snow or ice when your foot is off the accelerator pedal, B mode will slightly reduce steering responsiveness.