A daily feed refresh leaves a gap that causes real trouble. A product sells out at 2pm, the feed still says in stock until the next morning, and the ad keeps sending clicks to a sold-out page. Excluding zero-stock items with a custom label or a supplemental feed rule keeps ads running only where stock exists. The downside is that excluded products drop out of the auction, so Smart Bidding loses its history for them and has to relearn when they restock.
Seasonal stores with lots of one-off items should probably exclude aggressively. A store with a steady catalog is likely better off just speeding up the feed refresh, since that closes the gap without throwing away learning. How often does your feed update, and do you handle out-of-stock in the feed or on the landing page?