I think there is a third option. God created for relationship and thus the rules (natural law) allows for God’s participation in events. However, relationship is not control, and participation is not intervention. IOW natural law is never set aside but natural law is not a causally closed system.
Accordingly your objections to options 1 and 2 do not apply to this third option. God is involved and that involvement is part of the original design.
This is an argument to which I am opposed and I see no functional distinction from pantheism. It raises the question of whether God is unwilling or incapable of real creation – creating something that can stand on its own. And neither of these look viable to me – neither of these are a God which I can admire, neither are an authentic relationship.