For most users, an XCI Base + a separate NSP Update is the gold standard. This allows you to keep the base game read-only (like a cartridge) while applying patches on top. If you only have an NSP base, that works too—just be prepared for a longer initial install time.
Launch: From HB Menu → any installer → select base game + update → install to SD/NAND. Super Mario Odyssey Switch NSP XCI UPDATE
NSZ with update merged.