Kinda late to this, but my vote depends. I'd always prefer Physical hands, but only if the grab poses for all interactables are set up accurately or are procedural (good quality procedural). If certain objects don't have good grab poses, or if the visibility of the hand messes with the visibility or functionality of the object that's grabbed, I'm fine with hands disappearing when those objects are being grabbed. These are just general thoughts, and more important than all of this is the level of quality for each interaction and grabbed object. I'd prefer time to be spent on the weight of objects and their collision sounds and accurate colliders rather than on grab poses, but great grab poses with physical hands would be the icing on the cake.