Generally if they have flamers or a lot of fire like banshees, Hades ext... It is better to chem or you will just run laps of the ship putting out fires constantly anyway, then you have no time to repair and end up in a really bad situation. But if they have little-no fire based weapons/ammo chem can be more trouble than its worth, in which case you are better off with extinguisher ussually.
But keep in mind your crew and your own ability as well, on mobulas and bottom deck galleon chem cycles can be near impossible to maintain, especially if you have a less experienced gunner who means well by repairing his own gun but leaves no time between for you to chem ( Though that issue Can ussually be fixed fairly easily through good communication)
like practically everything in this game both work well, which one works better is very situational and personal preference.
I personally live by chem spray, it breaks my heart seeing all my beautiful components all non-chemmed and vulnerable.
PS: the CORRECT loadout order is spanner-mallet-fire tool