It is not a rule that mulch locks moisture.This happens only when you already have a strong soil full of life and lots of rain.
Lots of mulch and lots of compost actually can dehydrate the top layer of the soil. When you experience drought ,the wood acts as a spongue
draining the moisture out of the top layer.If you have minimal rain and lots of mulch,the rain will not even reach the soil layer to hydrate it.
It seems that a small layer of mulch and trying to boost soil life would be the best bet.Of course cover crops are so natural looking and you build soil via chopping and dropping
the upper part and leaving the roots to compost.Look at nature ,how much biomass do fall leaves or weeds bring back to the soil.It is a gradual small layer,not creating mulch towers.
That being said if you build soil life with wood chips,then because the soil organisms have a lot of moisture you counteract the wood acting as a spongue and draining the soil.
To me it seems that soil roots activate the soil,so whatever you do try to plant and plant and plant.