A stencil cut pattern out of a semi-rigid material (cardboard, Coroplast, etc.) is by far the fastest and most accurate way to install. However, that hasn't fully caught on (and in some cases it can just be a flimsy mess if there's not enough spacing to maintain rigidity), so pretty much every company that makes dimensional letters, sends tape-mounted letters with a paper pattern with outlined letters.
With paper patterns, I typically cut the entire horizontal center out leaving only the tops and bottoms of the letters. I cut pretty close to the line so there's just enough to know where the edge of the letter is but not so much that it's going to get stuck under the tape on the back of the letter. This ensures the letters are perfectly level rather than having to eyeball it. Other than a stencil pattern, it's the cleanest, fastest and most accurate method.
You can cut the corners of the letters out of the pattern and make marks on the wall, as mentioned, but depending on the tape used, you may have to make those marks up to 1/8" in, in order for them to not be visible once the letters are installed. And if you have to make the marks 1/8" in, there goes some of your accuracy. It's also time consuming cutting all of the corners.
I believe pouncing originated and carried over with sign painters. I don't know any letter manufacturers that sends (or even offers) pounce patterns with letters anymore. A paper pattern with outlined characters or a stencil pattern is faster and cleaner. But hey, if you have the capability in your shop and it works for you, good deal.
I used to carry a small block of wood with a tiny, very sharp brad nail sticking through and would mark the points of the letters using that. But even those tiny impressions in drywall were too noticeable for my liking.
Vinyl stencil patterns are asking for trouble on painted drywall. One spot where there's an adhesion issue with the paint and off it comes with the vinyl. Not worth the risk to me.