There is an importance difference if the item you're fabric painting might ever be washed. Watercolor paints for paper remain water soluble, and will wash out even once they've dried. The paint will also come off or smudge if it's dabbed with a damp cloth or gripped with a wet hand. Heat setting them with an iron won't make watercolor paints permanent. Only watercolor paints that include the word "fabric" in their name, that is "watercolor fabric paints", can be made permanent on fabric by heat setting.
The same applies to pastels. For permanent fabric painting, ensure that the pastel sticks you're using are formulated for fabric painting, not paper.