A physical bitcoin is simply a metal or plastic coin-shaped object, usually with a private key embedded aside. It is functionally identical to a paper wallet.

Both are only as secure as their storage medium, and passphrase, if one was set during creation.

A paper wallet is more secure than a physical coin with addresses, as the former you can make yourself, on your own machine, while with a physical bitcoin you never know under what conditions it was manufactured and who could have copied the keys.