Is there any advantage to a flesh form vs. a true form insect spirit? Aside from the vulnerability to pesticides, true forms have higher initiative, and, I believe please correct me if I’m wrong, immunity to normal weapons.
Also it talks about in the fiction insect good merges transforming into an inset form and then reverting back. I’m referencing the Super Tuesday adventure with the General where the insect spirit girls slaughters the border guards by turning into a giant mantis.
Assuming bug spirits can actually do this, is there any advantages besides scaring the shit out of people? Also if I do use the bugs in my game should I use the stats in MITS or Bug City? It seems that the ones in Bug City are more fleshed out, if you pardon the pun, but MITS is the more recent book so I’m confused.

MitS if you are playing SR3.

An insect shaman can only control a lower number of true form spirits to flesh forms, and flesh forms can often pass for human with proper attire to cover their bodies or as good merges. This allows the shaman to have a rather large hive, but not tons of really powerful and dangerous true forms. This isn't the case for all insect spirits, however, such as Mantis.

I have not seen the power to shift between forms mentioned anywhere other than that adventure. It is possible that is a power unique to her and grants increases prowess, she used a shapeshift spell, or it is something akin to a shamanic mask, IMO.

Flesh forms have a few advantages over true forms, though in most cases they're outweighed by their limitations:

* As K10 noted, shamans can summon/control them in greater force/numbers.
* Because it's linked to its flesh form body, knocking one out (deadly stun damage) doesn't send it back to it's metaplane.
* Flesh form worker spirits get a skill power at creation allowing them to perform a single skill at a level equal to their force (important for when the shaman actually needs to build things.)
* Good merges retain the memories/abilities of their host.
* A flesh form's physical stats are based on the stats of the host. For hosts with high physical stats (like trolls) low level flesh forms may be more dangerous than low level true forms.
* Depending on the quality of the merge, flesh forms often retain enough of their hominid form to use machinery, weapons, etc that are designed for humans. Situation dependant, 10 low-level flesh forms firing assault rifles on area suppression might be more dangerous than 10 low level true forms charging at you from across an open parking lot. (Even worse if it's 10 flesh forms on a construction site charging at you in bulldozers and heavy trucks.)
* Although they don't have Immunity to Normal Weapons, you can still load them up with armor and Gel packs if they've got an approximatly human form.
* Bundle them up in an oversized long coat and a floppy hat and they might be mistaken for a mis-shapen troll at first glance.

I also think that you can't banish flesh forms. Outright physical violence works, but banishing attempts = nada.

Use MitS stats if playing SR 3rd Edition, but flesh out the descriptions with any other sources like Bug City, Universal Brotherhood, 2XS, etc.

Mantid spirits are a special case unto themselves. See the Burning Bright novel.

Story-wise, flesh forms are the cool ones, especially good merges. There is that whole horror aspect of people being replaced by look-alike aliens, or being turned into misshapen monsters. Good merges in high places protected the UB for years.