When I first started building racing quads about seven years ago, individual ESCs were pretty much the standard. Each motor had its own dedicated ESC, and you'd wire them all back to the flight controller with power and signal wires everywhere. The moment 4-in-1 ESCs hit the market, they changed how we approach builds, but both options still have their place depending on what you're after.
The biggest advantage of a 4-in-1 is the weight savings and clean build. You're eliminating roughly 15 to 25 grams compared to four individual ESCs plus all the extra wiring. On a 5-inch racing quad where every gram counts, that's meaningful. I've measured builds where switching to a 4-in-1 saved me about 22 grams, which translates to snappier acceleration and slightly longer flight times. The stack is also much tidier since you just mount the 4-in-1 between your flight controller and frame, with only four motor wires coming out.
Individual ESCs shine when it comes to repairs and modularity. Burn out one ESC on a 4-in-1 and you're replacing the entire board, which typically runs between 40 and 80 dollars depending on the brand and specifications. With individual ESCs, you swap just the damaged one for maybe 10 to 15 dollars. I've had arms break in crashes where the ESC was damaged, and being able to replace just that single unit saved me time and money.
Heat management differs too. Individual ESCs spread heat across the frame arms where airflow is better. A 4-in-1 concentrates all that heat in one spot, though modern designs with proper copper layers and thermal pads handle this reasonably well. I run 2400KV motors on 6S with a quality 4-in-1 and haven't had thermal issues, but cheaper boards can struggle.
For racing specifically, I prefer 4-in-1 ESCs. The cleaner build means fewer wires to snag or break, and the weight advantage is real when you're chasing tenths of a second. For freestyle or when I'm testing new setups where crashes are frequent, individual ESCs sometimes make more sense because repairs are simpler. Current capability matters too; make sure your 4-in-1 can handle your motor draw with headroom. I typically look for at least 50A rated ESCs for aggressive 5-inch racing builds.