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The CDS View Entity a new kind of CDS view. A CDS view entity is defined with the statement DEFINE VIEW ENTITY. Similar to the CDS DDIC-based views, CDS view entities are used to model data sources based on database tables or other CDS entities.
It offers more and improved features and most importantly, CDS-managed DDIC view or CDS DDIC-based view is NOT created upon activation.

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ABAP CDS View entity – Advantages
CDS view entities are successor of CDS DDIC-based views and bring improved features such as

No CDS-managed SQL view is generated upon activation.
Implicit and automatic client handling, hence no annotation is required for client handling.
Strict syntax and annotation checks during activation.
Simplified handling of CDS extends
Faster activation and improved performance.
Restrictions
As the CDS view entity are new and more features will be added in future. Following are the restrictions at the time of writing this blog.

Select all elements from the data source using SELECT * is not supported in CDS view entities.
DISTINCT keyword and UNION clause is not yet supported.
It is not allowed to define a client field in the SELECT list.
Co-Exists
The existing classic ABAP CDS DDIC-based (DEFINE VIEW) view will co-exist along with the new CDS view entity (DEFINE VIEW ENTITY). It is recommended to use CDS view entities instead of CDS DDIC-based view due to technical improvements.