Although Ulf and I both tend to describe our roleplay preference as "develop in play" I'm going to make the case here that well-chosen design helps.
Design is what sets up the initial conditions and acts as a springboard. It's the starting point for a character journey: the point from which you can change. It also describes the points where you review the past for consistency and plot-hooks and do some prep and world-building for the future. Design is more like writing or reading fiction.
Development is what happens and changes once you let the character loose in the world. It's also what you improvise on the fly because you suddenly need to have a childhood memory to share or a "yes, and..." response to something that's happened in your world. Development is more like improv theatre.
The characters of mine who've been most successful have tended to have decent helpings of both.
Too much design without enough scope for responding and changing leads to inflexibility and railroading. If this is done really well it can be kind of fun in a set-piece fashion, but usually it makes me think "Uh-oh, pre-scripted plotline ahead. Let me know when you're done and looking to play with other people, 'kay?"
At the other extreme, starting with a blank or near-blank page can be enormously exciting because you have to wing everything. We were several sessions into one freeform game when the GM said "And with your third sword you...", "What!? I'm holding three swords?", "Yes, you're holding the third sword in your tail, silly" and the world suddenly shifted. (It turned out that we were post-apocalyptic rats.) Develop-in-play is where you get to spin stories as you speak or type or banter, inventing/discovering things as you go.
Develop-in-play can also easily run out of momentum when there's nothing new to bounce off: you generally need some prompts, hooks or personal drivers to keep a character moving rather than floating through life reacting to what comes along. You also need to be getting out there and roleplaying in ways which meaningfully develop your character, which can be quite tricky if you're starting out or still building a social network.
One of the approaches I've liked for character generation in what's essentially a develop-in-play game is "write 100 words about your character" with the expectation there you'll put hooks and ambiguities in the description which you won't know the answers to when you write them. Minimal design, but enough to give you nudges and quests and such later on.
When Ulf and I play in a shared background we tend to develop separately but check in now and then for some story-reconciliation and design. We both have characters from the Atamahara clan, for instance, which has had phases of conscious design connected by a lot of independent free-form development. We've got a pretty good shared shorthand of tropes and expectations, and our interactions with people who don't share those nudge us to extend and develop our play.
There are reasons you might want to do a strongly designed character. A character that's primarily designed and unchanging can be a good foil or straight-person. If you need a certain viewpoint to respond to or your group enjoys a certain style of repartee, you can have hours of amusement without needing much in the way of character development. If you need the character to play a certain in-game role, too, you might want a reason they stay being an interstellar trucker or pay a dividend to another character or whatever.
In general, though, I tend to value journeys and quests and "How did the main protagonist grow and change in the course of this arc?". This can lead to a problem in open-ended RP: what do you do when you've changed a lot, found a setting where you're comfortable, and have settled down with a mortgage, kids and a nice little extraction plant on a planet? The typical responses are to throw in some drama to upset that balance or to turn into one of those reliable designed characters that has it all basically worked out. I'm pondering this a bit at the moment.
In summary, I strongly recommend develop-in-play underpinned with enough design to make deep, interesting and consistent worlds and people.