In *Pitum HaKetoret*, the "למה" is the "regular" "למה", meaning "why". However, according to R' Ovadia from Bartenura, the "ולמה" in *Orla* means "ובמה", i.e. "in which case" (and **not** "and why"). Therefore, to explain how R' Ovadia's reading sits well with the text, the *Tosfot Yom Tov* explains that the "ולמה" isn't the "regular" "למה" (with a *kamatz* under the *lamed*), it's a "*lamed shimushit*", i.e. "ל-מה", meaning "for what purpose", or in our case, "in which case".

To clarify - both your suggestions would fit the text in *Pitum HaKetoret* (just like asking "why" vs "for what purpose"), but as mentioned above, that's not the distinction made by the *Tosfot Yom Tov* in *Orla*.