I installed the MAS version years ago and it seems to auto-update just fine for me.
When there is a beta, I install that from developer.apple.com and the two work just fine on the same machine.
XCode presumably works fine if you work with it daily. What I can't fucking stand is having to download it to do something unrelated to it (and, lol, how it decides to be the terrible default editor for every file that's even vaguely related to code and then I have to go update all the file associations).
I especially hate that you have to download a second copy every year for the Mac beta. Especially when you have no desire to ever write Swift or Obj-c code in your life, like most of us.