I believe option #1 is the correct methodology, except, I would only include the $300 on the current year return and make a note that there is $100 charitable contribution carryover to 2021.

I agree that $21,600 is the current year limit that would, in general, go on Schedule A, leaving $400 carryover.

However, as you indicate, they will be using the standard deduction, so the $21,600 is "utilized".

This leaves the $400 of which you will use $300 as you are now taking the standard deduction.  This leaves $100 carried over to 2021.