If you mean to use the original parent pokemon on option 1 after already using them for option 2 multiple times, that should be acceptable because the option 2 children would follow option 2 rules and be as if they didn't exist to the rest of the playerbase.
Otherwise, if something was born through option 2, its children (and its children's children, and its children's children's children, etc.) would not be tradable or usable in tourneys/comps, regardless of breeding option choice.