I would think that, generally, using this lock to cinch the bike up close to the lock point, e.g. around the seatpost/lock point, minimizing access for manipulating and cutting, would be the most effective use. Looping it long through the wheels provides fantastic access for cutters at all angles, and affords lots of room to "work" the lock strap as well, so less than ideal (from a cut attack perspective). If the main attack is against the locking mech, then maybe loose through the wheels but away from a hard surface (assuming a strike attack) would be better.

In any case, it's clearly indicated for low-risk scenarios, so it probably won't matter much either way.