Following this thread closely. We are about to face the exact same decision and the replies here are gold.

Strong agree. Good defaults beat a wall of toggles every single time.

Appreciate the clear steps. The dry-run tip in particular saved me from a mistake I would not have caught otherwise.

One caveat for larger communities: keep an eye on the indexes. At a few thousand rows the difference is night and day.

Yes. The recommended approach is to use Access Rules on the space: set the rule type to Membership, pick the level, and set the space visibility to Private. Members at that level and above see it automatically; everyone else does not.

Solid breakdown. The only thing I would add is to back up before making the change — better safe than sorry.