As others have said, if you randomly generate your password and store it in a password manager, it does not matter one way or the other, security-wise. Diceware is more effective if you need to memorize the password or type it into a keyboard.
Long passphrases are the current recommended best practice.
However, there are many applications out there that still enforce arbitrary „complexity rules“, which were once in the old NIST standard, or have maximum password lengths of 16 characters or less. In those cases, you cannot use long passphrases.
For this reason I create 18-char random passwords most of the time, although I prefer passphrases. This usually gives me a valid password on the first try, whereas when I use a passphrases I often have to fiddle with the thing for minutes until I figure out the requirements.
For the second part of your question: IT systems (such as password managers) that create passwords for human consumption should generate diceware-type phrases or offer the option. This decreases the chance of the user changing it to something of their own choosing. However, for an initial password that is changed on first login it does not matter at all.
Also, if you are designing a system in this time and day, you should be aware that the whole concept of „memorized strings“ is essentially broken and push towards 2FA, hardware tokens or stuff like that.
There seem to be some misconceptions around about entropy and password "length", especially regarding diceware.
First off, diceware is a random password, and is as secure as it gets. It just uses more characters per bit of entropy than a random-character string. From a theoretical point there is no difference between a 5-word diceware phrase, 11 alphanumeric characters and a 20-digit number (other than length).
In other words, diceware maximises memorability, while a random string maximises "entropy per character". The former is often a more useful property than the latter (in which the OP is right). The latter is needed if you have a very limited amount of characters for your phrase - which shouldn't be the case in modern systems, but often is.