If I understand correctly using option #2 you may still change collections manually - they are just not synced to the calibre library? If I've misunderstood please correct me and ignore the rest of my comment
As banjomike mentioned, option number 1 seems ineffective. As for me, it is VERY ineffective because I delete collections when I deem them useless; ex. "Pride & Prejudice" have the tags/collections: Fiction, Classics. When transferring to the device I use "Classics" if I have three or so more Classics books on device and so I delete "Fiction". Otherwise, if I have few Classics, I delete that collection and use "Fiction" instead. And so I keep my books easy to find without having hundreds of collections
Having the deleted collections pop back again is more than a little troubling so alternative #2 is definitely preferable for me