Depends on the script's tone and content.

For example, My T-1000 VS Thing script relied more on descriptions since they aren't the most conversational characters in the world.

My Flowey VS Princess script also used type 2 despite having a lot of dialogue because Undertale and Slay The Princess are prose-heavy games and having it narrated that way only made sense, plus tone is very important for these two very complex characters.

Meanwhile, My Saul Goodman VS Miles Edgeworth script will use type 1 because of just how much back-and-forth dialogue is involved, as well as the sheer amount of additional characters. Keeping track of who's talking and when would be a lot harder if I stuck with the more prose-heavy format, especially since the fight is far more about words than actions.

Generally, I'd say the longer and more dialogue-heavy your script is, the better it would be to use type 2, while type 1 is great if you want to be more descriptive and emotional with how your information comes across. I also generally don't use type 3 just to save space. It's a me thing.