Both are good and functional. It probably boils down to preference, at the end of the day.
Bit holder:
+uses cheaper 1" bits
+over time, you'll probably acquire bit sets that include a bunch of 1" bits, so there's a good place to use them
+for obscure bit sizes, like Torx 15, you probably won't bother getting long ones, so this is what you'll need
+you'll occasionally need to stick the 1" bit directly in the nose (because of a lack of room), so having short bits around is useful
-bit holders that aren't 'impact ready' can break in time. For a couple of bucks, you'll replace it. Eventually, you'll lose your mind and buy something like a Wera Rapidaptor for $25 or so.
-a tiny bit more wobbly than a direct bit
Impact-ready bits:
+a little bigger and harder to lose in your pockets
+if you buy 3" long ones, they'll interchange with your Picquic screwdriver
+(edited in, following comments) a longer bit will sometimes let you get into a tight spot or sink a screw more deeply than the bit holder
-a little more expensive, and heartbreaking when they break. (And they will. At the least convenient time possible.)
5mm is one of the most used sizes for IKEA furniture, but 4mm and 6mm are common as well. I doubt a nice sturdy foot on a couch would be using anything smaller.
If you have some bike tools around, try them. They will be metric sized hex.
Best Answer
Depending on how many you have and what is at risk ... could fit the T40 screw head socket with the largest possible hex/allen bit, spray the T40 recess with silicone, clean the hex bit, dab some quick curing epoxy or liquid metal into the recess, immediately followed by inserting the bit (only) until cured.