I vote for option two, but, as I don't recall how it was handled, how do we deal with the unpredictability of nades? Bouncing off/getting stuck in people/props, odd angles, frozen physics, ect. Do we just treat it as wards and figure if someone is using it, they're responsible for the risk of the radius being larger than they thought, or is there a little more leeway?

Hyper: given the number of them you have, a usual strategy is to simply use them as weak wards and block paths and give an early warning system. Especially the smoke nades, you DON'T want to put those on a site, because people can use them as cover. While I agree it can be a strategy, I'd think using it on the sites would actually be worse for you, wouldn't it?