The problem is that when it comes to determining what's anti-competitive, yours is not the opinion that matters. According to the article, multiple US states, a US House submicommitee believe it is anticompetitive and now a UK regulator is also investigating whether it is. This is not a hypothetical like you think. It is what the people in power actually are on record about.
Your option 2 does not exist. Just full stop.
So we're left with the idea that every other browser in the world can improve privacy, but not the one that most people use. Do you seriously not see how fucked up that is? Why do you want to build up this garbage narrative about how it's not the fault of the authorities?
You're asserting that "killing 3rd party cookies is not anti-competitive". You presented no proof about this, it is just an opinion. Your entire point about what the valid options are is based on this assertion.
On the other hand, several US states and a US house committee apparently think otherwise, and the UK regulators think it at least merits investigation.
And yes, when evaluating whether there is regulatory risk from "killing 3rd party cookies", obviously the group from the previous paragraph is going to matter more than yours.
I am not "accusing you of the thing you're against". I'm not even sure what "you're against" or what the accusation is supposed to be.
What is possibly anti-competitive is their proposed alternative. And frankly I'm not sold on the supposed privacy of such an alternative either (which, in order to be functionally different from 3rd party cookies, will have to store personal identifying information in a location that users cannot access, edit and/or control).
Note also that (to my knowledge) browsers are not currently obligated to protect their users' privacy (though perhaps they should be, it makes more sense than punishing websites for sending cookies). This leaves google at least 2 completely legitimate options:
1. Keep 3rd party cookies.
2. Kill 3rd party cookies.
Sure the first will cost them their privacy conscious users and the second might hurt their ad business, but rejecting that choice on the sole grounds that it would hurt the bottom line of a different venture is textbook anti-trust. They'll probably list other reasons for not taking that second option, though I've not found them terribly convincing so far.