Potting up -- root ball position

[Barnowl]

I might be splitting hairs here, but I was wondering which method of potting up might be better. In the first diagram below, the root ball is set to the lowest point while still allowing a little bit of soil below the ball for the roots to stretch out into. The second diagram places the root ball in the centre of the new cup allowing roots to equally grow below and on the submerged stem.

I realize that you want to have the stem under the soil so that roots will grow, thereby maximizing the root system and the growth potential of the plant. But when is it placed too deep? Could you sink the root ball right down to the bottom to get even more stem under the soil (maybe topping up as the top leaves get past the rim of the cup?) or would the reduced space of soil under the root ball set the plant back. What’s the best balance point?

Jamie