HMP terrains have some pros and cons that MDL terrains don't have, but MDL terrains have pros and cons that HMP terrains don't have.

HMP terrains use a grid system and must always be a full square or rectangle. This means having terrains be rendered beneath buildings and in unseen areas slowing the rendering process. MDL terrains don't have this limitation and can render faster in this case.

MDL terrains don't use the grid shape and thus have freedom of shape. This means being able to create overhanging/vertical cliffs, tunnels, and other such paths otherwise impossible with terrains. Plus, when you have large, flat areas or areas where the slope doesn't change for extended time, HMP terrains require adding additional vertices and polygons that could otherwise be removed using fewer polygons for faster rendering.

HMP terrains only use a top view and the UV map cannot be modified at all, except only the texture and texture size. MDL terrains don't have these limitations and are thus more flexible.

The only two downsides to MDL terrains is that they don't allow for chunking like HMP terrains in 6.4x and later. They can render more slowly if they do not use fewer than 30% of the polygons and vertices than the HMP terrains (I found this out from doing experiments). The other disadvantage, even bigger, is that they can take 3 to 5 times longer to make, but there are tricks to speeding it up.

Overall, MDL terrains have more advantages. Use them if you need these advantages, can reduce the polygon and vertex count by at least 30%, and/or don't mind spending a lot of extra time to make one.