I would argue it is neither option 1 nor option 2. It is a generic form of foreknowledge. This leaning on the ους which is impersonal, non specific and thus imprecise. Therefore it is open to anyone and everyone if they so choose to be part of the foreknown or not.
It is not that God foreknew person A would accept His Son, and person B would reject Him. Rather that people who love the truth would accept His Son, of which person A happens to be a truth lover and those who reject the truth, reject His Son, of which person B happens to be such a person.
This word does not mean God pre-selected specific individuals. God foreknew those who would accept His Son (collectively, in general), those who by their free-will (limited though it may be) if (that’s another prerequisite they must hear the gospel) presented with the gospel will chose His Son.
How did God know?
Simply put, because they would gravitate toward truth. Thus when they are presented with the truth found in the Scriptures, they will believe the Scriptures.
“How then will they call on him in whom they have not believed? And how are they to believe in him of whom they have never heard? And how are they to hear without someone preaching?”
And believing the Scriptures the Father draws them to His Son.
“No one can come to me unless the Father who sent me draws him.”
How does God draw a person, Jesus explains
“It is written in the Prophets, ‘And they will all be taught by God.’ Everyone who has HEARD and learned from the Father comes to me—”
So in what sense does God foreknow who to predestine? In the sense that everyone who believes the Scriptures, and is willing to be taught from the Scriptures they will gravitate to Jesus. This in no way pre-selects any one specific person, for all people are outside of Christ prior to being in Christ.
“And you were dead in the trespasses and sins”
Taking a step back, God had foreknowledge that those who upon hearing the gospel and believe the gospel will naturally gravitate toward the fulfillment of the gospel, namely His Son. Those people who would do that, He predestined (IN HIM)...
An example, I foreknow that putting candy out by the receptionist will lead to people taking a candy if they want one. Who will take one, I don’t know in advance but I do know that only those who see the candy and want the candy will reach and take some. I foreknow that much.
“For those whom he foreknew he also predestined to be conformed to the image of his Son, in order that he might be the firstborn among many brothers. And those whom he predestined he also called, and those whom he called he also justified, and those whom he justified he also glorified.”
Those God foreknew, meaning those who gravitate toward the Scriptures and thus to Jesus, to this group He has prepared certain things.
- predestined to be confirmed to the image of His Son
- He called them (John 6:44) (aorist tense)
- He justified them (aorist tense)
- He glorified them (aorist tense)
Ephesians explains who is predestined and how.
“even as he chose us IN HIM before the foundation of the world, that we should be holy and blameless before him. In love”
The choice was open to anyone who would be IN HIM, and as mentioned earlier no one was in Christ, if anything we were all in Adam. But in Christ we were predestined from before Creation. We only benefit from the predestination the moment we enter INTO Christ.
As such God foreknew to predestine those who would accept Christ. He did not predestine anyone to accept Christ. Nor did He put His finger on the scale to sway someone to accept Christ.