I kinda do both. It's something I learned from Edge of The Empire, and I liked the idea, so I started using it with other games.
I'll use minis, chess pieces, bottle caps, or whatever to show general locations of things, but then I use theater of the mind to fill in specifics.
For example, I might have the players arrange their minis to show me what their formation is while exploring, and I'll probably plop down a few things to show that a creature is to the left or right of where they are, but then I'll describe distances and location details via theater of the mind.