Anyone who has ever been forced to fire a handgun inside a structure or enclosed space is unlikely to want to repeat that experience. A 3"-barreled .357 magnum revolver might be the ultimate proof of that simple fact. Muzzle blast, muzzle flash, recoil will all be extreme, probably physically damaging to the shooter whether or not he hits what he is shooting at.
There is no portion of my home that offers a greater distance than about 30 feet indoors. I live in a residential area of a city with neighbors on all 4 sides. My home is of frame construction. All of these factors dictate against high-performance or magnum ammunition of any kind.
In the 3" L-frame I would lean toward either 148-grain wadcutter target loads or 158-grain lead semi-wadcutters, at standard pressures and velocities (not magnum, not +P loads). Enough is enough, and too much can be way too much.
YMMV.
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