Multiple-Input Multiple-Output (MIMO) systems and sub-TeraHertz (sub-THz) bands are being considered for the development of ultra-high data rate applications in beyond 5G. However, sub-THz band suffers from many technological limitations and severe RF-impairments such as low output power, limited resolution of high-speed ADCs, and important Phase Noise (PN) introduced by the Local Oscillator (LO). In this paper, MIMO Spatial Multiplexing (SMX) and Generalized Spatial Modulation (GSM) are compared from different perspectives while considering the sub-THz impairments. The effect of PN has been investigated for both systems in sub-THz channels using uniform linear and rectangular antenna arrays. The comparison is also performed in terms of Peak-to-Average-Power-Ratio (PAPR), power consumption, detection complexity and transmitter/receiver cost. In addition, the link budget and the system power consumption is estimated for both systems. The obtained results reveal that, when low order modulation schemes like QPSK is used, GSM outperforms SMX by a gain ranging from 4 up to 6.2 dB with a throughput rate reaching 0.5 Tbps that leads to 3.25 dB power gain with medium PN and non-coherent detection. Thus enforcing the GSM to be a promising candidate for ultra-high wireless data rate communication in sub-THz bands.