Factorial-2.sm (7 KiB) downloaded 17 time(s).

You can guess by the error message (function is not defined).
The key is that you are using a recursive pattern, and in the first case the internal Factorial() can't be calculated because the context in which the function runs is the "top level" (the canvas), where Factorial(1) doesn't yet exists (it will exists for the next region on the closest canvas pixel on the right side).
The line() on the RHS of a define operator (colon) creates a sub-level that inherit everything from the higher level(s) including the function whom the line() belongs, and that's why the second function works as you expect.
The bottom examples are unrelated because are not recursive.

Hope it helps.