I want to create a window dub with source footage timecode for logging. I have the clips in sequence on my timeline and select media file as the time source in the timecode overlay in the effects section of the Export Settings window. Regardless, the timecode overlay remains what looks to be generated timecode (starting at 0:00). My workaround is using the timecode effect on each individual clip which shows correct source timecode.
As you are exporting a 'sequence' - selecting the source as 'media file' will alway generate timecode that represents the timecode of the the sequence - not the source clip timecode of the clips in the sequence.
As far as I know there's no way to get 'source clip' timecode using the timecode overlay tab in export.
The way you are doing it works of course but there might be an easier way.
Create an Adjustment layer. Place it above all your clips in your sequence and extend it to the full duration of your sequence.
Apply the 'timecode' effect from the Premiere Pro Effects panel. Make sure all the settings with the timecode effect match your sequence* and see if this works.
* playing around with this briefly I got some weird timecodes ... but I think that's because I had a whole bunch of clips that were not the same frame rate as the sequence. Anyway have a play.