In the simplest cases they are the same. But as soon as you complicate things they are not.
They do what it sounds like it does, one controls how many records are read, InOBS) and one controls how many records are output. Since the number of records read obviously affects the outcome they are very different. Here's an example of the exact same code and INOBS=2 and OUTOBS=2 in each run. Check the output.
title 'OutObs demo';
proc sql outobs=2;
select age, count(*)
from sashelp.class
group by age
order by age desc;
;
quit;
title 'InObs demo';
proc sql inobs=5;
select age, count(*)
from sashelp.class
group by age
order by age desc;
;
quit;
Results:
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