Is it OK if my brake pads are not “just” touching the rotor in my cable disc brake bike? Mountain bike, cable disc brakes.

My bike suddenly took a lot of effort to ride after maintenance. So I loosened the cable locking bolt and released more cable for my bike.

It’s running much better now and the brakes seem to work fine though looser, but not so loose that the lever go too close to the handlebars once engaged.

On online resources I see that they adjust the brakes so that they are just touching the disc? If the gap between the brake pads and rotor is bigger but the brakes are not too loose, is that ok too?
Yes, saying to make it "just touching" is kind of misleading. If you can get it adjusted so there's some gap and it never touches but the brake is adequately grabby without danger of bottoming out against the bar, that's a good place to be.