My product URL is
The actual path (breadcrumb) is
Would it be better in terms of SEO if the URL was the same as the breadcrumb?
Breadcrumbs do not effect SEO. Sorry. They are only mark-up that can appear in the search engine response page (SERP). In that respect, they may help click-through rates. And to my recollection, I only recall clicking on one ever. So to answer your question, make them what you want. Where they can effect SEO is as a link. Just think of it as an internal link. Just make sure they are links with full URLs like I failed to do. ;-) Glad I caught that before it went bad. Just a little brain fart.
If you think one option is better as a link then go for that one.
I have seen no evidence that matching URL and breadcrumb help SEO.
If anything, I would say that shorter URLs are better for SEO. URLs are much clearer and users actually have a chance of remembering or typing them when they are short.
As a user, I'd rather use the simpler one.
Introducing many levels into the URL also causes other headaches. If any of your categories are renamed, the URLs change. If blue widgets are moved from "kitchen" to "household", your URLs change. Maintaining this history so that you can redirect properly sounds like a royal pain in the rear, and a SEO disaster when it breaks.