SharePoint Extranet & intranet migration to SPO

Hi Nadine, I am still evaluating extranet strategy in SharePoint Online. But since the original posts is old, I can update on some key things:
Option 1 is the most feasible approach and extranet users can be added to tenant as "external users" and they need not be assigned any licenses . Good governance (making sure internal sites have sharing disabled) can prevent accidental sharing of intranet sites with external users. The main disadvantage is since extranet users are present in our company Azure AD , they will appear in SharePoint people picker even in the internal sites.

Option 2 : For this there is no double licensing involved as company users can be added as guests to new tenant and reuse their existing licenses in the second tenant. There is clear separation of internal and extranet tenants. Additional tenant needs to be purchased with minimum 250 seats.