Both materials make a good patch. They fail in completely different places, and knowing where saves you a run of patches you will not want to issue.

Line width is the first fork

Embroidery has a floor: below roughly a sixteenth of an inch a stitched line stops being a line and becomes a smudge. Registered marks, thin rules, small type and anything with hairline detail all live under that floor.

A mould has no equivalent limit at patch scale. If your artwork depends on fine detail, the decision is already made for you.

Colour matching is the second

Thread comes from a chart. Your brand colour is matched to the nearest available thread, which is usually close and occasionally not close at all, and it will differ slightly between thread lots.

PVC is mixed to the reference you send, so the colour on the patch is the colour in your brand guide, and reorders from kept tooling come back identical.

Durability, honestly

Embroidery frays at the edge, snags, and holds water. PVC does none of those things: it is UV stable, washes without bleeding and ignores salt, fuel and solvents. On kit that gets genuinely used, a moulded patch routinely outlasts the garment.

The exception is feel. Some people simply prefer the texture of thread, particularly on dress uniform, and that is a legitimate reason to choose it.

Where embroidery still wins

Traditional heraldry with no fine detail, dress uniform where the texture is part of the look, and very large patches where the rubber weight would start to pull on a light garment. We will tell you when that is your case.

The practical test

Look at your artwork and find the thinnest element. If you can imagine it disappearing, mould it. If your brand colours matter to somebody who will check them, mould it. Otherwise either material will serve you well.