This is rather a creative decision taken by the individual library developer.
Strictly speaking adjusting input level (and output level to compensate, or doing both in opposition with the recently introduced Trim/Gdrive option) is the only way to get truly natural distortion as originally captured, since this retains the correct relationships between the levels of each captured harmonic.
However, using the Drive control will with many libraries give a pleasing and very musical effect, even though it's departing from reality.
Personally I would decide on an individual library basis from:
a) the developer's advice b) what my ears tell me sounds 'nice'
You have to be very careful when adjusting the drive knob , the results can be unpredictable on the freq curve as this is not true to the original sample anymore .If you want to see this then download this=
@timp - yep, I've seen (and heard) harsh ringing from various peaks above a few kilohertz when you overdrive some programs, although others sound fine until they start to break up.
Sadly I don't think the new Trim/Gdrive control allows you to push levels any further - from what I understand from Nebula developers it's simply a very handy way to change input and output levels in opposition so you can instantly hear the audio changes as you push a program harder
@elam - yes, developers have to update their programs to use this new control, but from what I understand it replaces the current Drive control when it's used, so developers (at the moment anyway) get a choice of either Drive or Trim, and if you opt for the convenience of Trim you lose the ability to Drive your program softer or harder
Some like the option of pushing their libraries into benign distortion, sos I suspect the Trim control will end up being used more with clean/hyper-realistic effects.