Use the overall downscale.
1) It lets you switch resolutions without needing to rescale your artwork and maintain different resolution versions of each. Keeping a version of each asset for each resolution, plus version tracking revisions is a massive PITA. Only do this if you are bouncing between resolutions and need 100% top-quality at each res.
2) The in-preview squash-stretch uses a low-quality rescaling method. Wear a striped shirt and squash your webcam to see how bad it is; does the same thing to anything you resize in-preview. Want everything native for that reason.
3) The Settings downscale dropdown box is a full-frame, post-compositing downscale. So everything can alias into each other, keeping a higher overall visual fidelity. The in-preview rescale does NOT maintain antialiased/gradient alpha maps, so you get hard edges between elements (again, very visible on any resized camera, especially with Chromakey on).
So yeah, use your monitor's native resolution, or whatever res you run your game at. Downscale using the Settings dropdown from there. The performance hit even between downscale methods is negligible; mostly what will work best for your current game based on personal preference as far as the output, rather than worrying about any overhead. (Bicubic for retro games, Lanczos for anything else seems to work best here)
All of that said, ANY downscale WILL incur a quality loss. Top-quality, you need to cast at native resolution. Which means running the game at 720p on a 1080 screen (or windowed mode), maintaining a 720p art asset set, and a separate profile in OBS for 720p native. It's a major hassle, but it leads to the best stream quality you can put out.