They are not different
Suppose you have already installed Ubuntu and want to try Kubuntu. Most of the stuff is already there. Install the Desktop Environment (DE), option 1.
Now you have both. Each DE comes with some default applications. You can use any application in any DE. You can log out of one DE and log back into the other DE. Your files will be in the same place, just the environment will look and work different.
Now suppose you like KDE better and don't like Unity. You have another computer, and you want the KDE on that one. Install Kubuntu directly on the computer. Go for option 2. Kubuntu uses the KDE Desktop Environment, Ubuntu uses Unity by default. But they are both the same distro (Ubuntu).
The default applications are different in different DEs. Some DEs have more common default applications than others. For example Unity and Gnome have many common default applications. The default applications in Unity and KDE are somewhat different. If you start with Unity, and install the Kubuntu-desktop, option 1, you will have the default applications of both the DE.
If you go for option 2 and install Kubuntu, you can still install some default applications of Unity if you like them better. For example, you can install Firefox, the default browser in Ubuntu in a fresh Kubuntu installation.
The difference between the flavors are in the set of packages installed. However, all flavors of Ubuntu use the same repository for downloading updates, so the same set of packages is available regardless of which flavor you have installed. New flavors have to go through a process to become a Recognized Flavor.
Reference: Ubuntu Flavors
Hope this helps