Greetings,
It’s a tough call as to which of those options is best - it really depends on your product’s aesthetic balance, the expected life of the product, the target of prominence for the brand, any requirements for additional information along with it, etc.
In my experience, raised brand logos hit with a padprint do a great job of announcing the brand but do wear as you guessed - especially if this is a hand tool, likely to be abused. A sensitivity to how high it is embossed and how it talks to it’s surrounding surface features is also important. Bosch does a great job of this type of simple brand communication.
Pad printing directly on a surface of a hand tool can quickly make a product look ‘cheap’. We’ve had to do it from time to time and have never been particularly happy with the result. See ‘cheap Black & Decker sh*t’.
Labels, in my opinion, are the best option when done right - and they speak of permanence and maturity - it takes intention to dedicate a 1mm recessed area for the brand - but it offers color break opportunity (wise, as trying to match surrounding plastic/paint color will be impossible), allows you to stick to the actual brand graphic (where you may have to compromise the graphic to mold or padprint) and allows quick private label derivative mods if the sales force business model requires it. If you do go this route, insist on a matte finish, solvent resistive vinyl with a 3M approved adhesive - and if you spec the label size as a .5mm step in off the recess boundary (include an orientation chamfer or mark if necessary) it will never peel.
I hope that helps.