“What the GE hypothesis says” is not really up for debate. Your option 2. is pretty close, but it’s more nuanced than that, since the ability to reproduce is itself only one of many abilities we living things possess. Please keep in mind that many of the people on this forum claiming to address GE have never read anything written by Dr Sanford, least of all his book Genetic Entropy.
The VSDs outweigh selectable beneficials by weighing more … as in, the mutational deck is stacked very heavily in favor of damaging mutations, with beneficial ones only being found on extremely rare occasion. Mutations are mistakes. Mistakes are usually not good.
My suggestion to you is the same one I have for everybody else: read the book.