The product library is the catalog. Line items are what you actually sold or quoted. When a rep adds a product to a deal, HubSpot creates a line item based on it, and the rep can change the quantity, price or discount on that line item without changing the product. Deal amounts can be calculated from line items, and quotes and invoices are built from them.
This structure lets you report on what is selling, not just how much. With line items on deals, you can see revenue by product, average discount, and which products are often sold together. Without them, every deal is a single number and product questions need spreadsheets.
Problems start with an incomplete library. Products with no price force reps to type prices by hand, which produces inconsistent discounts. Products with no SKU are hard to match with finance and billing systems. Line items with no price or no deal create gaps in revenue reports and quotes that cannot be sent.
Keep the product library owned by one person or team. Give every active product a price and a SKU, archive retired products rather than deleting them, and check regularly for line items with missing prices.
Example
Ironwood Fitness Equipment, a fictional supplier, had 300 products in HubSpot, a third with no price. Reps typed prices into line items, and the same treadmill was quoted at five different prices in one month. The operations lead filled in prices and SKUs, archived old models, and set a discount limit on quotes.