@Ashok Zubrewar​ Hi. IMHO, the best practice is Option2. This will help you

1. To isolate and best manage your CICD pipelines,
2. To provide access controls at the workspace level for different users . Ex more privileges in Dev vs restricted privileges in Prod workspace
3. To restrict access on Source data . Ex Dev data can be given access only to Dev cluster, Prod data can be given access only to Prod cluster.

Please see if this helps.