It does neither.
You seem not to grasp that translating εν + dative is not left open to your whim. The usage here is clearly locative (ie. a location). If you were correct (which you most certainly are not), you would have to translate "and they put His body in the tomb" as "and the put His body with the tomb," which is--of course--absurd.
Translating Greek is far more than looking up words in some lexicon. Grammar matters to translation.
The Archangel
The location is where we set our mind, with fleshly desires or with spiritual contemplation. Thus, with is contextual.
Did I say grammar does not matter in translation? Nope, so yet another implied false charge.
Here are some of the "interpretive translations" of the vague phrase "in or with the flesh!"
1. "living the life of the flesh,"
2. "identify with your old nature"
3. "ruled by your desires,"
4. "ruled by your sinful selves."
5. "live as your human nature tells you to;"
6. "live according to the flesh"
7. "ruled by the power of sin"
8. "in the realm of the flesh"
9. "doing what your sinful old selves want you to do"
10. "living the way the body wants,"
Context matters!!