I think it would be about the same regardless. What looks good to
your eyes or those of the homeowner would be the only criteria. A
flashing is typically used between the butt joints which interrupts
the look of the product anyway. It's the nature of the beast, the
least expensive siding there is.
If you're careful to cut the sheets so the grooves line up vertically, I
don't see that it would make any difference. If you do not line up the
grooves, I suspect it would look weird regardless of the groove spacing.
You might also consider going "grooveless", and just use rough sawn
plywood. If you want to enhance the appearance, you can add vertical boards
on top to simulate the old "board and batten" style of siding.
We used rough sawn plywood on our house, with the intention of adding the
battens. But we were happy with the way the rough plywood looked by itself.
Almost like stucco, but stained with an opaque redwood stain.
Regardless of the plywood you use, be sure to use "z-flashing" where the
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