A paddle controller for the Atari 2600 had a hard stop, so that it could only make one revolution (or a bit less) in each direction. Therefore, you could use it with Tennis or Pong or whatever else just had you going back-and-forth.

https://en.wikipedia.org/wiki/Paddle_(game_controller)

A driving controller spun freely in both directions without stopping its motion. This was not analogous to the steering wheel of a car, but it did permit driving games to be relatively free-wheeling, and you could spin the car's wheels endlessly in either direction.

In my experience, paddle controllers were more compatible with more games, but if you had a diverse library, it behooved you to keep driving controllers on-hand for that eventuality. Other unique controllers included the BASIC Programming pads, and one of those space games which had some really intricate controls on the dash.

The "driving" controller class was the type that was supported by Tempest. Analogous to the arcade controller, you could spin indefinitely in either direction without having the physical tab to stop the motion. This definitely contributed to the fun and suspense of the gameplay!

One is basically a self centring sprung up/off/down switch. That would be similar to a car indicator stalk and simple left/right arrow keys.

Another would be rotary with a stop but it sent a physical position, presumably it was something like a variable resistor or very fine resolution rotary switch. With these you could instantly position your character by the position on the ring/slider. This could be interpreted as position 1, 2, 3 etc etc.

The third was a free spinning which moved the character faster the faster you spun it. This would be how I remember Tempest playing, you could slowly nudge it or just do a fast spin & stop to quickly move around. This would produce a signal such as clockwise+very slow or anti-clockwise+very fast.

I had several driving games, too. But they used a joystick or the paddles.