I’d even take it a step more granular. Award XP for finding clues. Then, even if the players are confident that they have found the solution, they are incentivized to keep looking for clues anyway to get the XP for them, which extends the mystery portion of the adventure and helps further confirm the players’ suspicions if they’re right, or might lead them to the correct solution if they’re wrong.
Using story-based advancement, which is what I assume you mean here (milestone XP means awarding XP for completing milestones), is always a trap, in my opinion. It seems like it will be less bookkeeping and allow you to insure your players are at the appropriate level at the appropriate time. But in reality, it robs you of the most powerful tool in the game for incentivizing behavior (such as finding clues, as described above), and if your players don’t tackle things in the expected order, if they manage to skip sections of the adventure by coming up with clever alternatives, etc. it can actually lead them to being under-leveled just as easily as XP can, if not more easily. Also, XP is more psychologically satisfying for the players. Humans love watching progress bars fill up, especially if they feel like they are filling as a direct result of their actions.
There are some cases where it’s appropriate. In something like Adventurers’ League, for example, session-based advancement is a necessary evil. But for a home game with a regular group, or even a large-group game with a fixed set of players and DMs, XP is vastly superior. I’m all for true milestone XP - granting experience points for reaching certain story beats, or accomplishing goals, or even for number of sessions. But cutting out the progress bar element of XP and just telling the players when to level up does the game a great disservice in my opinion.
I like this advice, and my modification would be that it doesn't even need to be a villain. The best 'villains' are other heroes whose goals are against the players. No good villain thinks they're a villain - often, they just think they can run the world better.
I mean, it's either that or the characters stay 1st level through most of the adventure, because there's not enough combat to level them up appropriately, nor is there actual guidance in the adventure (or in the DMG) to have any idea of how much XP to award for gathering clues.
There’s quite a bit of combat in the early part of Dragon Heist, and the later part expects the DM to interject Faction sidequests to get the characters appropriately leveled (though I’ll concede that such an expectation is pretty poor adventure writing.)
