I like both, but I prefer
Margaret because it's never been either viral nor neglected (though it's pretty well neglected right now, come to think of it). Also, the hard g prevents it from sounding like margarine.
I like
Maggie and
Peggy. They could hardly be more different, but that's fine: if one doesn't suit a little
Margaret, the other surely will. Where I live, the standard nn for
Margaret is
Margie, pronounced with a hard g as in
Margaret, not a j sound as in
Margery. And I really cannot enjoy it at all.
One of my great-grandmothers had
Margaret as her middle name, and a cousin on the other side of the family married a lovely
Marjorie. If I had to choose, I'd use
Margaret.