In the practical aspects of what I am currently doing, XMP works better for me. If I was doing something different, DNG might of course be better and I have that option at any time should I choose to follow it.
When you archive your LR images to DNG including the metadata, as you might do if you were about to stop using LR, it embeds an up-to-date image preview then. But in the meanwhile, LR already caches internal previews of everything, which do not need to be extracted from the source file.
Since I do not browse the Raw images directly, and more or less never move or rename files, having an up-to-date preview and metadata in a selfcontained file would just mean extra processing for no benefit. If I do move some files around I can either do so as an entire folder, which includes all XMPs automatically, or more usually do that inside LR, which includes all XMPs automatically. It works fine, I have never "lost" an XMP, nor would it greatly matter to me if I did .
And remember that I may have several sets of differing metadata and correspondingly differing image previews relating to just one Raw file. Only one of these can be written to the file anyway. If I want to browse those differing versions, under my current setup, I either use LR directly (this is preferable, in that I can immediately change anything I don't like) or else I browse exported JPGs or TIFFs that I may have made reflecting these different treatments.
RP