I've used both of the solutions you describe in the past, these days I don't mess with the service accounts and just write my powershell to use the secret store
https://github.com/PowerShell/SecretStore
https://github.com/PowerShell/SecretManagement/tree/master/ExtensionModules/CredManStore
This should be addressed in LA 2020.2.5 since RC1 has the option to use any Windows credential defined in Orion. In addition, the default user has changed to Network Service: