Two very experienced paddlers have commented and given clear answers to the points you raise.
I am a far less experienced paddler, so consider my input accordingly.
At the heart of this issue is the process of exploring your limits. You can explore on your own, learning by trial and error what works and what could get you killed. Or you can participate in guided learning (in a club or other training program) designed to show you your limits so you can make informed decisions.
The main problem with Method 1: this is a terrible way for you learn how to evaluate risk. Like the cartoon Mr. Magoo, there is nothing inherent to the method that reliably indicates to you how close or far you are away from danger. You can guess, but you don’t know for sure. The natural result is that you will either plateau at a place (likely far) below your potential, or you will eventually experience a potentially fatal incident.
The obvious advantage to Method 2: it enables you to explore your limits in a guided fashion, teaching you what is still known as “good seamanship”. This method is not without problems because you have to find trustworthy people to provide good guidance for you. You are going to have to bring your own wisdom to that evaluation. That said, one of the great things about a club like SKABC is being able to compare notes with many other paddlers to help you index where you are in relation to common standards.
Good luck and safe paddling!