Marley can pull off both looks, but I think he looks extra cute with the shorter hair.
I like both short and long Yorkie hairstyles, and I think it depends on the individual dog which is best -- just like humans.
My original plan was to keep Maximo in a "puppy cut," but his body type and face made me change my mind. He would not be cute in short hair. My other boy would look good in short hair, but I don't think I want one super long and one super short.