How should having different data pack versions for different Minecraft versions be handled?

I can see two ways of doing this: either having one data pack file for each major Minecraft version (ex. one for 1.20-1.20.4, one for 1.20.5-1.20.6, etc) or using the new overlay feature to make a single file that's compatible with every version. Which one is more practical both from a user and creation standpoint? Are there any downsides to using overlays? In case that's relevant, my data pack contains mostly recipes, loot tables, functions, advancements and predicates.