The only rule on those connections is R03 A, which defines what can be attached the the battery without counting towards the robot weight:
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the 12V battery and its associated half of the Anderson cable quick connect/disconnect pair (including no more than 12 in. of cable per leg, the associated cable lugs, connecting bolts, and insulation) and
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We can break your question into two parts:
- First, what type of connector to use. Both types, if rated for the correct gauge wire and current specs, will certainly work. As an experiment, you can have your students hook them both up and look at the resistance between the wire and the terminal - any resistance there will cause a decrease (even though it's slight) in robot performance, as that resistance is consuming some of the battery power.
- Second, what type of insulation to use. Both electrical tape and heat shrink work great here, and are both sufficient for any insulation you need at terminals or between wire splices on the robot. Heat shrink tends to look a little nicer, which matters to some teams. Electrical tape is easier to remove, which is both a plus and a minus... if you think you'll need to get at whatever it's protecting, then it's great. If you don't, then having it peel off on you (for example, the end can peel up if it's repeatedly rubbed against something) is pretty bad (as it can lead to a short), and something you might need to watch for.