I could see both methods being used. I teach straddling the bag - but now that someone else has posed the question, I see the benefit of setting up more like a 1B as Bob referenced - outside of left foot on the bag. Just read Gunner's post - good point - I'm assuming this set up would mostly be for covering a steal. The "OLF" method may encourage reaching for the ball, vs letting the ball travel. And at lower levels (where I'm at), any benefit to straddling the bag will probably be lost as soon as the catcher releases the ball, b/c the chance of the throw being on target are slim. So playing in front of the bag may help the player adjust easier to a poor throw, and not get "stuck" on the bag.
However, as Gunner suggests - how often will a player be able to "assume the position" properly when covering a steal?
Question for EricF - what have you seen on these plays - are 3B steals almost always a "bang-bang", where the ball, runner, and fielder converge at nearly the same time, or does 3B have time to set up if she's not playing too far in for a bunt?
I like outside of left foot on the bag myself. The 3B can still let the throw travel - right to the glove and drop the tag. If throw is off then 3B can swipe. Not sure it's legal (I don't know the rules these days, but was legal when I played high school baseball), the infielder could drop their knee once the ball was in their glove to block the base. OLF method helps allow for that.
I remember playing 3B in HS and straddling as a runner chugged in to third for an attempt at a triple. He slid with his spikes high as I fielded the throw and got me right in the groin of my left leg. Wasn't fun.