Our goal is to understand the ambient curvature in terms of the curvatures of submanifolds. You always need 2 tangent vectors (in the correct slots); this is because curvature is an endomorphism-valued $2$-form. The other two slots can be filled in with tangent/normal vectors, and this basically corresponds to a block decomposition (relative to the tangent, normal direct sum decomposition) of the curvature endomorphism. In order to fully do this, one has to of course introduce the shape tensor/ second fundamental form.
Conceptually the different roles of the various tangent/normal vectors can be clarified in the vector bundle setting, where you start with a vector bundle $(E,\pi,M)$ together with a connection $\nabla$. Fix a direct sum decomposition $E=L\oplus L’$. The most natural questions then are:
- How does the connection $\nabla$ on $E$ induce connections on $L,L’$ respectively? (Answer: just differentiate with $\nabla$, then project onto the subbundle)
- How do these two connections differ from the ambient connection $\nabla$? (Answer: the shape tensor)
- How are the curvatures of these various connections related, and more specifically what is the block decomposition of the curvature $\nabla$ on $E$ relative to the decomposition $E=L\oplus L’$? (Answer: Gauss-Codazzi equations, namely Gauss’ equation is the diagonal terms and Codazzi’s are the off-diagonal ones).
See Ricci Equation $(\overline R(U,V)X,Y) = (R^\nabla(U,V)X,Y) - (B_U X, B_V Y) + (B_V X, B_U Y)$ for slightly more details on this.