Either is bad if done to a large amount. Underpropping results in rpm's going way too high. Ignoring the fall off in torque, it can cause excessive heat build up, component failure, lack of oil distribution, etc. as the rpms go high. An engine that tops out at 10K with a designed prop may do just fine being underpropped and running half throttle. But that one vertical at full throttle where it is hitting 16K ....(yes, I'm just picking random numbers for illustration)...
Still have the remains of my old YS 1.20 that blew apart at the top of a stall turn just for that very reason - running too small a diameter and way, way too small a pitch.....

But if truly intended to be a Hanger Queen, and will only be flown a few times - then cheaper is better......