I'd think the relationship will be less strained when they do not see each other every day because they live next to each other. At least one of them will feel bad. They may not show it, especially back in times when it would have been hard to get away, they may 'keep it all in' but they won't be happy.
It seems like in your parent poster's case, not being together and having a close relationship allowed both sides to be happier. Potentially to the point where meeting each other for like 3 or 4 holidays per year was tolerable and they could work it out but where seeing each other every day would have been miserable for at least one side or potentially openly hostile for a very long time.
It doesn't mean not having any relationships but just because you're family doesn't mean you have to be constantly present in each other's lives.