Is it better to practice in a dry acoustic and work to fill the space, or in an echo-y room where you can hear all the richness of tone but all the dodgy bits too? Or does it depend on the instrument?

I would suggest best to use a dry room rather than echoey, but ideal would be something in between.

Either extreme would not be natural, and would certainly force yourself into trying to compensate when in fact, you cannot really compensate for acoustics.

A room with some soft furnishings and curtains that can be drawn to control some acoustics might work at home. Otherwise you could treat a spare room with a few acoustic tiles and similar items to get a live but not echoey space.

Richard
Hong Kong

Best acoustic is a very very dead one. It means you can her every single detail of your playing, whereas if there is any reverb it will cover your sound slightly and allow you to ignore small inaccuracies. A dry sound also makes your tone worse (it is unflattering), so you have to really work for everything.