Internal or external is usually very close to equivalent in value. I would choose based on what you are trying to do. If you want to cash out SBD to fiat, go ahead and use external because you're going to need to go external to get to fiat anyway. If you want to use that SBD to get STEEM to use or power up, then use internal (fast, no fees, no risk of funds being lost due to exchange problems or transfer errors).
Either way, your advice to not convert under these conditions is the most important point. Not only does it hurt the user (who gets less) but it hurts the system since it takes SBD out of circulation.