It’s a combination of both, I believe.

The initial conditions had a definite rotational bias. This is preserved in the current orbital plane and direction.

On top of that, anything massively off that plane is liable to hit or interact with the material in the plane, given enough time. It will be flung around, eventually either out of the system or into the plane.

Stuff orbiting relatively close to the plane will have a biased pull towards the “average” plane. This will slowly flatten the orbits out.

All these processes take a lot of time. The solar system, in general, has had enough time to settle. The ort cloud and other outer bodies are still quite chaotic. We see a lot more off plane than within the traditional solar system. They experience the latter effects far less, and so take longer to equalise. They still have a bias towards the initial spin however.