I do both.
I have some stems (overheads, toms) and here I pan and adjust relative levels in Pro Tools. For stems, you'll have to do this to set the relative positions and levels of the individual tracks. Once I have the correct panning and relative levels, then I use the 8804 faders to get the stem levels correct in the mix.
For individual tracks (kick, snare, bass, vocals, etc) I try to set the level in Pro Tools at zero and adjust the levels with the 8804 faders. However, I can't always set the Pro Tools level to zero because the tracking was cold or hot; in this case I may need to set the level in Pro Tools different than zero to get a reasonable level thru the outboard gear (near the sweet spot).
Regarding automation, I use it a lot in Pro Tools: taking down spikes to avoid extra compression/limiting, cleaning up tracks (for example taking out guitar hand slide noise, mistakes), etc. However, I try to use the 8804 whenever I can. For example, easing tracks in and out, and building to the chorus, I will usually do this with the 8804. I could do it in real time with the 8804 or automate in PT, but:
(1) The 8804 is quicker
(2) I like to move the faders according to the flow and drive of the song, which is hard to do when doing automation, and
(3) Faders are more fun.
But..........you don't have the fader moves stored away for later use, like you do with automation. So.............a trade off.
I really like having the option to both automate and use the faders. I always do both on any song.