Back to topic: Seen from the classical (score-based) point of view, every new arrangement of a score makes a new Work Style / Classical / Works - MusicBrainz, (Arrangement Works). Since it is often difficult to track the exact version for a given arrangement, the workaround is to create a Work with the disambiguation “catch-all for unknown versions or arrangements” Style / Classical / Works - MusicBrainz (Different versions). Thus, having two different Works is clearly in accordance with our guidelines and would ask for keeping these separate.
Remains the problem when this “classical” guidelines should apply and whether this particular Work “Knickerbocker Holiday” should follow these guidelines. This is not always easy to decide, particularly for Composers whose Works are at least partially written in a “classical” tradition (Kurt Weill, Leonard Bernstein, George Gershwin, to name just a few). So far “Knickerbocker Holiday” has been edited consistently following the classical style (with the overall title preceding the Song title) Musical “Knickerbocker Holiday” - MusicBrainz. For other theatre Works Weill composed in America, mostly for Broadway, we have a mix of classical and theatre style (with the overall Work in the disambiguation) Work “Lost in the Stars, Act I” - MusicBrainz
Unfortunately the guidelines for theatre Style / Specific types of releases / Theatre - MusicBrainz do not mention Works, but just say “Depending on the release, it may be more appropriate to instead apply classical style (as used for opera)”. Whatever we decide to do, these inconsistencies should then be normalised.
See also my comment on Edit #87474608 - MusicBrainz