carbon and its compond
The characterization of a group as a functional one or a substituent depends on the context or situation in which it is referred to.
A group is functional when it is already present in a chemical compound, and this group also determines, wholly or partly, the distinct properties of the compound. Thus, when you consider the structure or composition of ethanol (CH2CH2OH), the hydroxyl group (-OH) is entirely a functional group. The chemical properties of ethanol mostly revolve around the potential of the -OH group in reacting with sodium metal, PCl5, conc.H2SO4 or acetic acid, as is the case with any other alcohol having the same -OH group.
The same -OH will be called a substituent when it becomes a prospective replacement for another group that is already present in a molecule by chemical interaction. Thus, when ethyl chloride (CH3CH2Cl) is reacted with alcoholic KOH, the -OH group of the latter becomes a substituent, as it is expected to replace the chlorine atom which is already present in the molecule.
Thus, the labeling of a particular chemical group as a functional group or a substituent vary according to situation. When the group is already present as an active part in a molecule under consideration, it is a functional group; and, when it is expected to replace another functional group already present in a molecule, then it is called a substituent.