We fill & use the tank.
My brother usually connects to city only when his GF needed long showers to do her flowing hair.
I suspect it depends on the RVr's usage model - if they are parked for the longer duration, they probably connect to the city.
If, like us, we are on the move nearly daily where we boondock 2 or 3 nights out of 4, much of our water usage is away from city sources. Thus, even when in a campground, we'll run on the water we have until it's about time to leave. We then top up on fresh and subsequently empty the waste.