If I’m going to truncating and overwriting a hosted feature service every day in ArcGIS Enterprise is it better to truncate, or drop and create?
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I have used both. Truncate will preserve the ESRI ItemID and as a result any applications that reference your Hosted Feature Layer will keep functioning fine. I believe if you were to drop and create you would end up with a new ItemID and then break whatever references the service (maps, apps, views etc). Hope that helps!
In your case, i’d leave it as a truncate. A drop and create will also go through and recreate schema.