Accurate simulation of multiphase flow in subsurface formations is challenging, as the formations span large length scales (km) with high-resolution heterogeneous properties. To deal with this challenge, different multiscale methods have been developed. Such methods construct coarse-scale systems, based on a given high-resolution fine-scale system. Furthermore, they are amenable to parallel computing and allow for a-posteriori error control. The multiscale methods differ from each other in the way the transition between the different scales is made. Multiscale (finite element and finite volume) methods compute local basis functions to map the solutions (e.g. pressure) between coarse and fine scales. Instead, homogenization methods solve local periodic problems to determine effective models and parameters (e.g. permeability) at a coarser scale. It is yet unknown how these two methods compare with each other, especially when applied to complex geological formations, with no clear scale separation in the property fields. This paper develops the first comparison benchmark study of these two methods and extends their applicability to fully implicit simulations using the algebraic dynamic multilevel (ADM) method. At each time step, on the given fine-scale mesh and based on an error analysis, the fully implicit system is solved on a dynamic multilevel grid. The entries of this system are obtained by using multiscale local basis functions (ADM-MS), and, respectively, by homogenization over local domains (ADM-HO). Both sets of local basis functions (ADM-MS) and local effective parameters (ADM-HO) are computed at the beginning of the simulation, with no further updates during the multiphase flow simulation. The two methods are extended and implemented in the same open-source DARSim2 simulator (https://gitlab.com/darsim2simulator), to provide fair quality comparisons. The results reveal insightful understanding of the two approaches, and qualitatively benchmark their performance. It is re-emphasized that the test cases considered here include permeability fields with no clear scale separation. The development of this paper sheds new lights on advanced multiscale methods for simulation of coupled processes in porous media.