why not both? mark up the book while you're reading, reflect in your notebook on what you read

Exactly. Personally, I gravitate toward book and topic-specific notes and highlights in the book itself and use the notebook for bigger-picture things for which book references play some role. I do a lot of highlighting in ebooks and lately I've started using LogSeq. I'll pull quotes from books into LogSeq and then tag them with whatever #bigger-picture topic I deem relevant, mimicking what I do on paper.