I tried to buy physical PC games as recently as 2014, and what i got was a steam code and and 8 DVD’s, and the game still needed a patch to work. So Physical on PC games to me is DRM free. I can put it on my own thumbdrive/USB to make it physical if I wanted it to be.
As for my preference. It depends on the game and deal. If I know I want the game, and I’ll buy it no matter what, then I’ll aim for the DRM Free copy.
Otherwise it depends on the sale. I mean for $3 I don’t mind loosing access to SimCity 3000, $3 is a good price even for limited access. Let alone free.
What I refuse to buy is a offline game like GTA 5 that requires a proprietary launcher and account to even play. Here I will just abandon PC gaming entirely and go to consoles. Rock Star, Ubisoft, EA games in particular I primarily buy on consoles.