How do we differentiate between the use of the word "Sunnah" in the context of the Prophet's (peace be upon him) affairs and its use to differentiate between Fard (obligatory) and Nafl (supererogatory)?

The word "Sunnah" is used in Islamic legal terminology with several meanings, including:

That which was transmitted from the Prophet, peace and blessings be upon him, and was not explicitly mentioned in the Holy Qur'an, or that which encompasses his method, peace and blessings be upon him, and the method of his companions. It is used in contrast to innovation (Bid'ah), so it is said: "So-and-so is upon the Sunnah" if he acts in accordance with what the Prophet, peace and blessings be upon him, acted upon, or if he acts in accordance with what the Companions acted upon. Among some later Hadith scholars, it refers to the sound belief that is free from doubts. Among later jurists, it refers to that which one is rewarded for doing but not punished for neglecting. However, this is a recent technical term and should not be applied to the Sunnah mentioned in the words of the Prophet, peace and blessings be upon him.

The distinction between these meanings is made by considering the speaker of the term and the context in which the word was used.