I think you need better wording for Option 1: Support Ukraine sufficiently so it can make its own decision if they want to continue fighting.
For Option 2 I actually don't see a lot of downsides except dead European soldiers replacing dead Ukrainian soldiers. Russia would absolutely stop if being stopped in their tracks more ferociously. In fact, Russia is already fighting this war all out. If they could they would do more (or at least I can't phantom why they would not).
Russia had a lot of equipment in storage, equipment that was supposed to be maintained. Strangely enough a lot of that equipment never saw any maintenance despite the maintenance budget being spent. That money 'disappeared' into someone's pockets.
Now these were conventional weapons, guns, tanks, trucks, etcetera. Stuff that you could imagine being used at some point, so there was some risk of being found out.
Now imagine you are a Russian general in charge of maintaining the nuclear stockpile. Weapons that you can reasonably expect never to be actually used. Even better, if you ever get in a situation where they would be used, it's basically the end of the world and no one is going to be alive to care if you pocketed the maintenance money anyway. How much of the allocated maintenance budget do you expect to have been spent on actual maintenance?
US intelligence agencies have said that unlike the other branches, the Russian nuclear forces are well managed and have relatively low levels of corruption. The gist is that more than enough of the rockets will work just fine and deliver bombs that will go boom.
For Option 2 I actually don't see a lot of downsides except dead European soldiers replacing dead Ukrainian soldiers. Russia would absolutely stop if being stopped in their tracks more ferociously. In fact, Russia is already fighting this war all out. If they could they would do more (or at least I can't phantom why they would not).