I haven't used a dolly myself, but have done over 5,000km line-towing / flat-towing / a-framing whatever you call it, which is similar
I considered the towing dolly myself, but went away from the idea as it required the dolly to be registered in my country, which means more cost. I can't comment on the legalities over there sorry.
But the two methods are very similar, it's just my front wheels are on the ground. You have to consider that your car + the dolly are unbraked, so you need to have a car you feel comfortable towing ~1500kg unbraked.
Also, you need to have the ability to have signals on the back of the towed car - i did this by splicing a trailer plug into the towed car's taillights and running wiring to the tow car. Isolating the battery in the towed car allowed it's lights to work like a trailer. Cost $20 for wiring and a plug, much cheaper and easier to use than a temporary light board
The other issue was the towed car's ride height. If you end up raising the front wheels by half a foot to a foot off the ground, it can sometimes mean the rear bumper would be dragging on the ground.
People tend to think towing a car with a locked / tight rear diff is a no-no, but i've been towing with a locker for a long time and haven't had any issues. It does "push" / understeer the tow car as you turn into corners, but if you know it's going to happen you account for it
And then you need to consider if you have a bingle in the rear you need to have replacement arms to be able to put it on the road for the tow home
Hope that helps!