Either will work, but, of course, the roots have more growing room in the ground. The plants look way too crowded. I would pinch out most of the smaller ones (and use for cooking) and just leave 4 or 5 in the pot.

Alternatively, split the clump up into 5 or 6 sections and plant the hunks either into the ground or into separate pots.

Even if you pull the clump apart, the plants in each piece will still be too close together, I think.

Each plant will grow less vigorously than if grown as an individual but this method does work and you'll still get loads of basil.