In Active Passive clustering, Instance1 would be active on node1 and on node2 SQl Services will be in stopped state. When ever a failover happens the SQl resource group will failover to the other node node2 in the cluster.

In Active Active clustering both the nodes node1 and node2 act as primary servers but for different instances. consider below example for better understanding.

Instance1 will be active on Node1 and on node2 the SQL server services of instance1 will be in stopped state.

instance2 will be acvtive on Node2 and on node1 the SQl server services of instance2 will be in stopped state.

Thus on both nodes N1 and N2 we have SQL Server services, but at a given point only 1 node will be primary. Since both the nodes N1 and N2 will host as primary for 2 different instances this concept is called Active - Active clustering

Hope this clarifies the confusion.Let me know if you need more details.