[lillecarl]

Ah, yes. Well you can set up multiple tunnels for lower overhead too, all you need is an interface so you can bind it to a VRF. You save 50 bytes on every packet though in reality either way works.

As long as you're lowering MTU and not bridging your VXLAN you're fine.

You can run VXLAN over any L3 so it's versatile like that, but the benefit of VXLAN over other encap protocols is that it's simple, accelerated in a lot of hardware, integrated with BGP-EVPN to make scaling easier, more predictable and traceable.