My 2 cents…
If you make a big rackspace, then duplicated it, the pros are you get patch persist between the rackspaces (overlapping sounds) and the agility to change plugin presets between rackspaces. The downside to a rackspace-centric approach, in my opinion, is if you change something about your rackspace and you want that change to be the same across all your rackspaces… you have to change each rackspace individually, so do some tests and plan accordingly for that approach. It’s what I mostly use, in conjunction with setlist mode.
If you use variations the pros are you have one rackspace and can change/reconfigure that and it will be the only one you need to change, so long as you don’t disrupt a feature that a variation relies on, like deleting a widget. The cons to variations are you don’t get patch persist between variations (unless you use scriptlets like this example). You also can’t change a plugin’s internal preset between variations so you’d need to use widgets to change all plugin values between variations.
Both can be used to control splits, transpositions, sound layering, etc… Slightly different approaches to how though.
Those are the biggest differences I find, neither is better/worse objectively on their own, as @pianopaul said… it depends on how you want to use GP… and you can use both approaches of course, with or without Setlist mode, mixed and matched as needed.
I’d set a bit of time aside and experiment with each approach on a small scale, without building out a massive gig file first, find what you determine to be strengths and limitations to each and this will help guide your ultimate approach.
I’ve evolved my approach over time as I change hardware and rethink my philosophy on how to use the software. I currently use mostly racksapces which all feed the global rackspace, with some variations mixed in, and for gigs I use the setlist mode to switch between everything, for rehearsals I usually just navigate within Rackspaces/Variations. I’m always trying new approaches though but have pretty much settled in to this approach for now.