Do what works best for your workflow.
Using fewer instances in rack mode might have a slightly faster load time, but on most systems I doubt you’ll notice any difference in performance either way.
An exception ‘might’ be processor intensive ‘synth’ sounds. Again, it’ll be system dependent…might help on some PCs, or it might not make any noticeable difference at all. If you have a really thick and complex synth sound that uses a lot of CPU, it can ‘sometimes’ be helpful to keep that in an instance of its own that gets its own outputs on the mixing console to help insure it gets a full thread by itself.
With multi-channel rack-mode instances You’ll most likely be using MIDI tracks instead of ‘instrument’ tracks. There are advantages and disadvantages to going with either track type.
An advantage to using separate instances in ‘instrument tracks’ (instead of MIDI) is the ability to make ‘midiloop’ files of individual, or groups of tracks in CuBase. A midiloop keeps up with the plugin and its state, and one can instant ‘preview’ them in the Media Bay. In contrast, with a regular midi file, one would need to load up the MIDI file first, then set up and connect it to a Sonic Instance. Yes, you can select multiple instrument tracks and export those as a group into a midiloop as well.
So, if you make a lot of track content that is reusable (pattern type composing…loops, reusable themes, chord progressions, short repetitive excerpts, etc.)…it’s a good idea to use instrument tracks with their own plugin instance.
An advantage to running a multi-channel setup in the rack-mode, and directing MIDI tracks (instead of instrument tracks) is that you get both MIDI, and Audio sliders on the Cubase Mixing Console. Also, MIDI tracks have aux MIDI sends if you need those.