I like that you are trying to tackle a very complicated situation and at the same time taking feedback from the community to help shape it. I don't think there is anything wrong with any of the 3 approaches, and its great that you lay them out for people to see the thought process.
I see a lot of insight in the comments and its good that players voice their thoughts when trying to help you make this decision.
I believe all 3 could work, and they will all achieve slightly different objectives. Therefore, the "what is best" is really in the eye of the beholder. Different people value different things, and see the significance of Brawls in different ways.
Personally I like to keep as many people happy as possible at this time because I feel that we have other tools coming in the future to create excitement. Therefore I would like to have the "least friction" possible while we wait for those things to happen.
I also think that @azircon's suggestion of making a community poll is a good idea, but I would add a twist to it. Let's revisit it in 2 months after release.
In other words, lets maintain flexability. Whatever is chosen by the community now may or may not be the choice after we see the implementation. This will give all people on all sides of this a chance to see results, judge the impact, and evaluate if we need to change course (or not).
We have a lot of great things happening in the future, lets make sure we have as many onboard for that ride as possible!
RE: Proposed Brawl Fray Adjustments for Conclave Arcana