Modern TLD ecosystems involve cross-script confusion patterns, not just ASCII↔diacritic.
Variant Sets (especially for IDNs) and LD Sets share the same underlying problem: user confusion.
Allowing them to co-exist under the same registry operator control respects existing variant principles (used for Chinese, Arabic, etc.).
Option 1 creates unnecessary policy barriers without improving security.
Thanks and regards
Harsha Wijayawardhana