Option 2 I think replaces everything below your index finger. For instance if you had this you would separate the quick disconnect from the black piece and re-use the QD.
Note that you also need to harvest an old valve and the pink washer from a used bottle for option 2.
Also, because they put that recess in it (kinda silly IMHO) you need to loctite the threads or it leaks (242/243 are safe for food gas).
I use option 2 because it was all that was available when I did the conversion, but I'd probably do option 1 today.