According to the manpage:
-r or --raw-control-chars
Causes "raw" control characters to be displayed. The default is to display control characters using the
caret notation; for example, a control-A (octal 001) is displayed as "^A". Warning: when the -r option
is used, less cannot keep track of the actual appearance of the screen (since this depends on how the
screen responds to each type of control character). Thus, various display problems may result, such as
long lines being split in the wrong place.
-R or --RAW-CONTROL-CHARS
Like -r, but only ANSI "color" escape sequences are output in "raw" form. Unlike -r, the screen appear‐
ance is maintained correctly in most cases. ANSI "color" escape sequences are sequences of the form:
ESC [ ... m
where the "..." is zero or more color specification characters For the purpose of keeping track of
screen appearance, ANSI color escape sequences are assumed to not move the cursor. You can make less
think that characters other than "m" can end ANSI color escape sequences by setting the environment
variable LESSANSIENDCHARS to the list of characters which can end a color escape sequence. And you can
make less think that characters other than the standard ones may appear between the ESC and the m by
setting the environment variable LESSANSIMIDCHARS to the list of characters which can appear.
less escapes ANSI escape codes by default, displaying carets (^) followed by codes instead.
-r does not escape these characters, so if the input contains random binary data, the console could output unintended gibberish as a result of any ANSI control characters. (That's why
less can't know what the screen looks like without processing these chars itself.)
-R allows only color control chars through, so output can contain colored text but not other formatting chars that could mess up the output.