Which of the two would you recommend (and for what reasons)?
Reading https://github.com/restic/restic/issues/549, it seems I should use b/, or am I not affected as /mnt/data and /home/michael don’t share a common top level directory?
It doesn’t really make any difference if you backup the folders separately or not. The only difference is that you end up with twice the number of snapshots (e.g. what restic snapshots prints). Since the folders do not have the same basename (data and michael) you’re not affected by Unable to backup/restore files/dirs with same name · Issue #549 · restic/restic · GitHub.
If you’d ask me, I’d backup the folders in a single backup. That way you can use the fuse mount and see the state of both folders at the same time.