I have memorized a few books before in a variety of ways. As for the method of loci, mainly context to context with adequate understanding. It proved to be less useful than expected. The issue was how the memory was structured. Even though I could recite the book over 8 hours conceptually, If I were asked a certain question, it would be a linear search in my head for the answer or the answer would be put into my own words based on the interpretation I had. The two issues you face with this are:
- The peg is not the information but your visual cue, as such when you are asked a question that does not include your visual cue , you will struggle to find out what it is that you are being asked. 2.Since you memorize things conceptually you will give your own interpretation, which can at times be fatal mainly for exams as you would attempt to explain keywords which causes a great addition of time exams usually require you to use keywords and not explain them unless it is a state the definition kind of question.
To explain 1 a little better, when you read text, you generally subvocalize the text (say it in your head with sound), if you memorize with the method of loci the cue to the memory is usually your visual cue or locational cue, your visual cue is only attached to sound if you revisit your palace quite often or have modified the method in one way or another and it is not a direct association with many abstract terms, in addition to that you generally end up with a conceptual answer rather than a precise one. This causes loss of examination marks if that is important to you. While there are ways around this, this is a generic thing. An example that is a little similar is music, If I had decided to ask you what comes next in a song you have memorized you would not struggle as much to tell me the answer. If I then said how many of these words appear in the song or What did this phrase in the song mean, you would struggle much more than you should especially if I say that you are not allowed to recall the song itself.
People generally find it easier to keep the same input and output format for memory. The above issue would for example be completely gone if you would be able to read in pictures rather than sound.
That said I have memorized books in a variety of ways , I will make an addition to my above statement and say that, working memory is not gigantic. Even if you remember the entire textbook, you may at most look at a subsection at a time in your head while recalling. This implies also to the method of loci. Hence if I ask you, ‘What is the table of contents?’, your answer in your head even if you have memorized it, will not be a parallel output of all the sections , it will be sequential in at most your working memory capacity.
Naturally you have no choice but having an entire book accessible for your exam if you want maximum marks. the main important point is to answer to a given question. If you have a question, you should be able to get the answer from it and nothing else. That means the question should direct you to the answer. The method you will use is up to you, all methods can have success as long as the main requirements are met.
To answer your second questions, the advantage to having an entire book accessible to your brain for an exam is that you do not make errors and succesfully answer all questions accurately. Most books explain concepts for you. How you have a book accessible for your exam is, much more important than having a book accessible for your exam.
Assuming you mean your loci are the objects then no, it is better for the association to have a object that refers to the information at hand. As such you should start a small room setting loci as you go on with studying.
Additional information if you want to store it in the specific room and no extra locations(which is the standard) , you would put another object inside the same room. The ‘loci’ as you refer to it would not be shifted but overall yes it would not matter as long as you can journey around the palace. Keep in mind that you can journey around your room too so if you have more objects in there (which usually makes retention a little more difficult), then you can have a mini journey through your room.