best practice consists of using the lowest ISO achievable with ETTR conditions, where "achievable" means a shutter speed and aperture that makes photographic sense relative to the subject matter. Is this correct?
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This discussion might be simplified of we put our imaginary cameras in full manual exposure setting mode, instead of the aperture priority mode that seems to be silently assumed in many comparisons. That is, we should not assume that shutter speed and ISO speed are tied together.
Then the first key to minimizing noise is using the lowest possible
shutter speed. If you are using aperture priority mode with no exposure compensation, this is the same as using the lowest possible ISO speed, but it is slightly misleading to attribute the low noise to the low ISO; the basic physical origin of the low noise (high S/N ratio) is the fact that a lower shutter speed gathers more light from the subject (at a given aperture.)
However, at a given shutter speed (and aperture), manual exposure setting allows more than one choice of ISO speed. For example we could choose between
(-2) f/2.8 1/250s ISO 100, with the meter saying we are two stops underexposed, probably requiring compensating up by two stops in post-processing.
(-1) f/2.8 1/250s ISO 200, with the meter saying one stop underexposed
(0) f/2.8 1/250s ISO 400, with the meter saying correct exposure
(+1) f/2.8 1/250s ISO 800, with the meter saying one stop overexposed
(+2) f/2.8 1/250s ISO 1600, with the meter saying two stops overexposed
Now, increasing ISO here will in general improve the S/N ratio, by reducing the impact of read noise and quantization noise in the A/D converter. I think that we are all agreed that option (-2) is probably a bad idea, (-1) is likely to be better, (0) to be better still.
But why stop at (0)? Why not keep going to (+1) or (+2) or so on?
Answer: at some point, the extra pre-amplification of the higher ISO speeds will cause highlight values to exceed the limits of the amplifier ("clipping"), or to exceed the input level that the A/D convertor can handle: let me call either of these problems "clipping".
But if you stop short of clipping, so that the highlights are pre-amplified to about the maximum level that the pre-amp can handle and the maximum input level of the A/D converter, producing near maximum output levels (about 4096 with 12-bit A/D), the results are probably optimal. This is likely to be far better than with one fourth the ISO speed, when the signal to the A/D converter is two stops lower so that the brightest highlights come out at only about level 1024 out of 4096 in 12-bit A/D output.
Most often, option (0) will be best, but for a scene no highlights much brighter than the metered mid-tones and with interesting detail in deep shadows, option (+1) might be better. And if the metered is dominated by a subject at low reflectivity (say 10%) and there are a few highlights at close to 100% reflectivity, over three stops brighter than the metered mid-tones, option (0) might cause highlight clipping, so that "under-amplification" like option (-1) might be better.
In other words, choose
a shutter speed and aperture that makes photographic sense relative to the subject matter
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and then decide whether to use the normal "matching" ISO speed or a different one.
Ray has the same idea as I have speculated about: an "ATv" auto exposure mode where one specifies shutter speed, aperture and maybe exposure compensation, from which the AE system chooses the ISO speed. Better yet, if the light metering could effectively scan all photo-sites to find the brightest highlights, it could choose an ISO speed just from shutter speed and aperture n order to have the brightest highlights come out at "level 4096".
P. S. But as Ray and I seem to agree, probably only in rare cases do deep shadows need this much care and feeding.