If you choose the second mode, you’ll lose life equal to the creature’s toughness when it was last on the battlefield.

If you choose the first mode, any Aura controlled by another player attached to the creature will be put into its owner’s graveyard as a state-based action after the creature leaves the battlefield.

Orzhov Charm’s first mode doesn’t target any of the Auras attached to the target creature.

For each of the modes, if the target creature or creature card is an illegal target when Orzhov Charm tries to resolve, it won’t resolve and none of its effects will happen.

If you choose the second mode, and Orzhov Charm resolves but the creature isn’t destroyed (perhaps because it has indestructible or it regenerates), you’ll still lose life equal to the creature’s toughness.