Hi @naarian
Both systems will record the change independently when you have a sale on WooCommerce and in your physical store (Square terminal). So, in your example, both systems will show that you have 9pcs left. However, the stock levels will be updated during the next sync event to reflect the accurate inventory, which is 8pcs.
This synchronization should work regardless of the sync setting, as the goal is to ensure that your inventory levels are accurate across both platforms.
As for which setting is more reliable and recommended, it really depends on your business operations. If you make more sales or stock changes on WooCommerce, then you might need to set the sync from WooCommerce to Square. Conversely, if you make more sales or stock changes in your physical store, then you might want to set the sync from Square to WooCommerce.
I hope this clarifies your concern. If you have any other questions, feel free to ask.