I think it’s best to tailor your teaching to the students’ abilities and preferences, but I believe the first few years are most efficacious if the teacher uses the “old-school” approach. Then, once the student has (hopefully) mastered technical problems and come to some understanding of musical styles, then they can be encouraged to branch out and create their own interpretations. But the teacher should never totally abdicate their responsibility to guide the student. If the student makes a really bad choice of tempo or style, I don’t think it would be good to just stand back and let them play the piece poorly for the sake of individuality. I would encourage every student to go to lots of concerts of different artists, take master classes with as many teachers as possible, and think for themselves! The more influences they get from really great artists, the better they will be at determining their own style of music-making.