Nothing wrong with either way IMO. You will get lots of opinions on this as there is no other "right" answer. I would do what the book says. Ive used a paper gasket and also used silicone to seal a water pump on Z32 with zero issues.
I recommend using Permatex Right Stuff (Grey color) for everything under the hood calling for liquid gasket. And LIGHT application. No need to glop it on.