Whatever setting is set in the server.properties file by way of difficulty, this setting will override any commands issued in game to change difficulty.

Example:

You set server.properties difficulty to peaceful, but then in-game you want to change the difficulty of The End to hard. You do /difficulty hard in the end, but the difficulty in server.properties overrides this and disallows mobs from spawning, despite issuing commands to allow for it. All other settings allow for mobs to spawn, but that one difficulty setting is overriding it all.

This was not the case prior to 1.20. You used to be able to have the server.properties difficulty set to whatever you wanted, and then be able to change the difficulty in game per-world as, presumably, intended.