Maybe I'm just a cranky old person, but it concerns me that the word/concept "mulch" is starting to be used in several different ways.
A mulch is something that adds to the soil, improves the soil, doesn't take anything away. I still have an issue with rocks being called a mulch, but they don't take anything away.
A covercrop, while it will eventually add to the soil if mowed or tilled, while it's growing IS using up resources and
water, and taking away from the soil (temporarily). So I honestly don't consider anything that's living a mulch :-)
I like to mow vetches and trefoils, burr clover down and discharge the bits onto the soil. I get a lot of
native vetches and trefoils where I am, and in the long run they are very good with biomass and nitrogen nodules. But they do seem to be able to compete with annual vegetables. Keeping it short will allow it to reseed next year, yet not get so big it starts to compete. I don't till because I haven't found it to help, especially when it comes to bumblebee nests, which I want to help protect. I think I read somewhere several years ago that some vetches actually have growth inhibitors.
If you can't get a mower in between vegetables, a pair of long-blade shears do a pretty good job. That's the chop and drop thing.
An important distinction: Permaculture is not the same kind of gardening as organic gardening.
Mediterranean climate hugel trenches, fabuluous clay soil high in nutrients, self-watering containers with hugel layers, keyhole composting with low hugel raised beds, thick Back to Eden Wood chips mulch (distinguished from Bark chips), using as many native plants as possible....all drought tolerant.