User licenses, permission set licenses, and standard permission sets
Key Takeaway
A license is a ceiling, not access. To use a feature outside their user license, a user needs both the permission set license and a permission set that contains the feature permissions.
A license controls what a Salesforce user is allowed to have, while profiles and permission sets control what the user actually gets. The user license sets the ceiling. Add-on licenses, such as permission set licenses, raise that ceiling for specific features. Salesforce checks licenses when you make an assignment, so a missing license shows up as an assignment error.
User licenses set the ceiling
Every user must have exactly one user license. You pick the type that best fits the user's role. An org can hold several user license types, such as Full CRM and Chatter Only.
Think of each permission as a lock and each license as a ring of keys. Before you can assign a user a permission, the user must have a license that includes the key for it. More than one license can support the same permission.
A user's licenses define the maximum functionality the user can have, but they don't switch that functionality on. Salesforce doesn't offer a user license for every variation of access. So you use profiles and permission sets to grant a subset of what the licenses allow.
Salesforce enforces the ceiling when you make the assignment. If you assign a permission through a permission set to a user who doesn't have the required license, you get an assignment error. For example, the Salesforce user license includes the key for the "Read" permission on contracts, but the Chatter Free user license doesn't. If you try to assign that permission to a Chatter Free user, you get an error.
Some user licenses also limit how many custom apps or tabs a user can access. Profiles and permission sets can grant only that number. For example, a user with the App Subscription user license and access to one Light App can access only that app's custom tabs.