The two problems are highly related, which is why it can do both. At the end of the algorithm, you have a per-pixel assignment of the (approximately) closest se

The two problems are highly related, which is why it can do both. At the end of the algorithm, you have a per-pixel assignment of the (approximately) closest seed pixel. If you want a voronoi diagram, then you color each pixel according to the identify of its seed pixel. If you want a distance function, then you color it with the distance to that pixel.