Would you guys prefer a game never to be made or to have to wait many years because it's too expensive and slow to create this kind of game by only 5 people? I reckon stand alone episodic releases are a good option in this scenario, there's other developer's that are taking the same route for similar reasons, an example are the games Kona and Kentucky Route Zero and they are of excellent quality and value already.
Of the two options you've presented, I have no such preference.
It's a big world out there and there are a great many game developers making games and doing so however they see fit, and that contributes to a very diverse gaming ecosystem which gives gamers a wide range of choice on the types of experiences they want to experience, how they want to spend their money and what they want or expect to receive in return. Some games will naturally become highly popular classics, while others fail, and others become cult classics or popular among certain niches. Some developers will have good ideas, and some bad ideas, some will have good funding, and some will struggle to find enough money to eat breakfast. Some will have a good solid business plan and be well organized and execute it with clock-like precision, and others will fumble around aimlessly without direction or knowing where they're going. There are endless other possibilities as well, all of them ending up somewhere on the sliding scale between success and failure, and it's all really up to the developers and their business associates/partners and how well they are able to build a small or big business based on video games with their ideas and execute it successfully and develop a fan base.
Who are we to tell them how they should do it really? Have we ever written a successful video game and built a business around it? Perhaps someone else here has, but not I. I have ideas about it and I'm sure many of you do too, but we're no experts with the golden keys to success in the video game industry.
So I think video game developers should chase their dreams and goals with their passion assuming they have passion, and do it the way think it should be done within the confines of the resources they have available or are able to raise, within their scope of expertise. They may succeed or they may fail, but that remains to be seen until they put out the fruits of their labours and the market decides what their game(s) are worth and how they stack up against everything else out there. Doesn't matter if the games are big or small, short or long, complete or episodic or any other variables - the market always decides in the end one way or another collectively, and no one opinion out there is the end all be all magic formula as to how things should be done or what is or is not acceptable.
I've stated my own thoughts concerning episodic games previously and that I'm not straight out opposed to them although I'm not particularly fond of the idea myself, but that I own and have enjoyed some episodic games also, acquired once the entire series or season was complete. That's what I am looking for as a gamer, an interesting looking game that appeals to me in some manner and which I feel is complete by my own definition and terms and worth the money being asked for it. If a game does not meet my expectations then I probably wont buy it or be interested in it. If it's a work in progress, then I may potentially withhold making a decision about it one way or another until it is complete in my eyes and revisit it again in the future for consideration.
Whether the game gets made or not, or whether the developers need to do X, Y or Z to be able to fund their masterpiece and find a way to eat or other behind the scenes details are matters I do not really need to know or be concerned about for the most part. They can do whatever they want, make full games, episodic games, artsy fartsy games, walking simulators, retro, whatever else is cool or exciting to them, others, myself or whatever and do it however they want. They can put it out in installments as episodes, or as a full game, they can charge money for it or make it free2play, they can offer DLC for it or not, they can use microtransactions or not - I don't particularly care either way.
At the end of the day, I simply surf what's available out there and choose things that interest me and which I think match my expectations and needs. If games exist that were developed and marketed in a manner different than what appeals to me, that's fine. I'm not obligated to buy them or be interested in such games any more than such games developers are obligated to create their games the way that I might think they should be done, or to build things that appeal directly to me personally.
So I have no preference for what the developer of this game does at all. I merely see it as a game and ultimately look at what it has to offer me and see if it has to offer something I wish to have or not as-is. If it does, I may be interested. If not, I may not be interested. If it isn't finished in my eyes under my own view of what that means for me - I may withhold my judgment call for a later day. It's not right nor wrong, it's just what is right for me, and someone else's way of determining it is what is right for them.
If someone is developing a game a certain way because that is the only way they can survive and put food on the table, best wishes for them and their family in being successful at it. The game may or may not be my cup of tea, but it doesn't have to be either. At the end of the day, the Earth still rotates and orbits the sun. :)