The question is not which one you prefer, but where on the continuum from one to the other you prefer. So here are my preferences.

I want swords to be weapons with edges, and maces to be weapons without edges. I want dogs to be quadrupeds and birds to have two legs and two wings. I want lions and tigers to be giant cats. I want water to flow downhill, rain to be water, and dirt with water to make mud. And there are ten thousand other bits of reality that we all sit down assuming.

I want the aspects that are not realistic to be carefully thought out, and usually to follow the general lines of some literary or fantasy base. Thus, chimeras should be lion/dragon/goat-headed, pegasi should be flying horses, and dwarves should be stocky, short miners who prefer axes to swords.

When there are exceptions to this, they should have a clear reason that works within that world -- like Rowling's house-elves or Pratchett's elves.

Totally new ideas should fit in with the rest of the world. Owlbears don't bother me in a world with hippogriffs and centaurs, but beholders and gelatinous cubes have always seemed a little -- off.

And these are general rules. Good designers can break them, as long as they make it fun.