Hi Ranjeet,
With CSPF enabled for TE tunnel: TE headend router run cspf on the database and calculate the tunnel path by looking into the constraints for the tunnels (bandwidth, admin group etc.), if constraints for the path are not satisfied, tunnel will not be signed at all (head end router will not send the RSVP path message to tunnel destination).
With no-cspf option for the TE tunnel: Headend router will send the path message to the next hope router if the constraints for the path are satisfied between head end the next hop router, NEXT router will again process and pass the RSVP path message to next to next hop router if the next hop for the tunnel destination satisfy the TE constraints. If TE constraints are not satisfied router will send the RSVP PATH ERROR message to head end router and TE singling will fail.
More details can be found in TE chapter of JNCIE study.
https://www.juniper.net/us/en/training/certification/JNCIE_studyguide.pdf
Regards
Satinder Singh