Good advice for many cases, certainly!
I would hesitate to say that it is mandatory to do this for all installations, however it is **almost exactly** what we did internally with the big onions, albeit at scale.
The rest of the site is configured (via our Loadbalancer setup) to see our onion endpoint as 169.254.0.1 - on the DHCP subnet - because we use parts of the RFC1918 space internally (as do most other organisations) and this (using 169.254/whatever) seemed the easiest way to ensure there would never be a clash. :-)
-a