Both approaches have pros and cons. This is exactly what Nile is solving. We want users to not worry about all the operational complexity of picking a choice. You can choose any approach in Nile.
In Nile, the tenant DB is a virtual concept. You can choose to place it on a multitenant DB along with all the other tenants or choose to place it on a dedicated DB. Nile provides a single experience irrespective of your choice and takes care of all the operational complexity. We also go one step further and also let you place a tenant in any location worldwide but still have one Postgres experience.
You can read more about it here https://www.thenile.dev/docs/tenant-management https://www.thenile.dev/docs/tenant-placement
Would love the feedback