Rebasing is definitely the better option if you can do it. Sometimes it is just too much of a pain resolving conflicts if you are rebasing a branch with lots of commits and there are lots of conflicts. In that case I normally squash and then rebase. Branches where there's enough history to be worth maintaining multiple commits should - 99% of the time - be separate PRs.

The rare exception is when you have multiple people contributing to a branch before it is merged into master, but for obvious reasons you should avoid that when at all possible.