When to use participle phrase to replace relative clause?

Hi, everyone.

Relative clauses are used as adjective clauses to modify nouns before them, but sometimes we would take out the subjects of the relative clauses and turn the verbs in participle form, and the participle phrases still function as adjectives, am I right? My question is when I can turn them in participle phrase and when I need to write the whole relative clause.

For example:
there was one thing confusing me.
/there was one thing that confused me

I assume the two sentences above are both grammatically correct.
But Is there any difference between them?
I always confused about which to use when I was practicing writing sentences involving this. Sometimes native speakers would correct my sentences changing my sentences from participle phrases to intact relative clauses, so I am confused about how to choose from the two options.

Thanks for your help!