How close to the truth
The chip counts in eighths of a degree and is allowed to be two degrees off. Those are different numbers: the step says how small a change it can see, the accuracy how far its answer may sit from the air's. This book promises NXP's ±2 °C, the looser of the two datasheets.
Two numbers that look alike
Resolution is the smallest step the chip reports: 0.125 °C, an eighth. Accuracy is how far the reported number may be from the real temperature: on NXP's datasheet, up to 2 °C either way from −25 to 100 °C, and 3 °C beyond that, to −55 and 125 °C. Both are maxima, not typical values.
The step is sixteen times finer than the error. So a change of 0.125 means the temperature really changed, and the chip is good at showing a room warming by a fraction of a degree. The number itself, 23.5, may be the room's 22 or its 25.
Two datasheets
The BOM names UMW's LM75BD, and UMW's own datasheet describes a better part than NXP's: 12 bits, a sixteenth of a degree, and ±1 °C across the whole range. LCSC's listing for the same UMW part quotes NXP's numbers instead.
Which silicon a given reel holds cannot be checked from the outside. So this book promises what both would meet: ±2 °C from −25 to 100 °C, steps of 0.125 °C or finer, and a new reading every 100 ms or sooner. The sketch divides by 256, which gives the right answer at either resolution.
What it is for
A number to within a couple of degrees, every tenth of a second, on two wires shared with other devices. That is a room, a case, a heatsink, a greenhouse, a fridge. It is not a clinical thermometer, and a reading of 36.8 from it says nothing about a fever.
When it does not work
Both can be right. Each is allowed ±2 °C from −25 to 100 °C on NXP's figures, so two of them may differ by up to 4 °C and still be in spec. If they have to agree, read both at one known temperature and store the difference as an offset.
First check where it sits: next to a microcontroller, a regulator or a warm hand it measures that. Then remember the room thermometer has its own error. A difference inside two degrees is within what the datasheet allows.
An offset, yes: note the difference against a trusted thermometer at the temperature you care about and subtract it in the sketch. It corrects this one chip near that temperature; it does not make the other readings better than the datasheet.
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