It would help the readers get a understanding of the authors thoughts regarding this ending if the afterword was also included in the translation.
TBH, Immortal Mortal doesn't feel like a novel with a planned ending but rather a novel which the author wanted to drop and therefore rushed the ending.
For example Record of a Mortal's Journey to Immortality is also a novel which actually has what many would consider a sudden ending.
But its end point is clearly where it had been planned, though it had a few open plot points regarding the Immortal Realm, given its title.
The author left an afterword saying that this ending was planned and that he would write a sequel recording Han Li's adventures in the Immortal Realm at a later date.
The 1st option you presented seems more closer to reality since the ending of IM felt like it was a rushed, half-ass job.