What’s “best” is what works best for you.
Back in the old days, when we all had two or more keyboards that each made their own sounds, I think most of us got used to changing patches on each keyboard individually for whatever sounds we wanted at the time. The only way to really replicate that (that I can think of) is jamming everything into one rackspace. I tried that initially, and it can work, but ultimately I moved to a different approach.
Right now I’m using rackspaces designed around the “main” sound (e.g., piano, Rhodes, B3, synth) and variations for the “auxiliary” sounds I might use with that. For example, I have three different VSTs I might use for the bass. I can switch among them with widgets that put the VSTs on bypass and/or midi in blocks and filters.
What’s optimal really depends on your individual situation. For me, where I have a sample-based VST that takes a long time to load and sucks up a lot of memory I try to minimize how many instances of that I have. That initially led me to that “everything in one rackspace” approach, because I was using Omnisphere for my Rhodes and the Yamaha piano (and some of the bass sounds). Putting those in five or six rackspaces made loading times too long for my tastes.
Then I switched to using Pianoteq for all my piano and Rhodes sounds (and Rhodes piano bass), and Modo Bass for my electric bass sounds. Thus modeled instruments vs. sampled instruments. So now I can load 20 instances of Pianoteq in less time and less memory than one instance of an Omnisphere piano.
I still use Kontakt for guitars (Orange Tree) and stick those in one rackspace with variations to switch between Fender, Strat, clean, dirty, and effects options. They take way too long to load for me to set up different rackspaces for all the permutations I might use.
Off the top of my head I’d say I use about 8 different rackspaces just for piano (all with Pianoteq). Most of them with only have one or two variations. I found it more practical to have separate rackspaces for Steinway D “pop”, Steinway D blues, Steinway D classical, Yamaha CF, Yamaha CFX, etc.than to have 50 widgets to control every parameter that changes between variations.
It’s different for my other keyboard sounds. I have all my Rhodes variations in one rackspace, all my B3 variations in one, all my Vox Continental in one. In each of those I have about 3 other VSTs that I can switch between using widgets/variations for the different bass or auxiliary sounds (that in the old days I’d access by changing patches on the other keyboards). That works well for me, but if I were setting it up again I might just skip the variations and have different rackspaces for something like John Lord Hammond, Green Onions Hammond, and maybe some more generic clean or dirty Hammonds.
In the end, “everything in one rack” didn’t work for me, but “separate rack for every combination of VSTs” didn’t work either. The nice thing is GP gives you a lot of flexibility to play around and figure out what works best for you.