#1 is a terrible idea if you ever need to hire an electrician in the future, plan on selling your house, etc. The National Electric Code prohibits using white, green, or grey wire for a hot/load connection. The 120V cable will contain a black wire for the hot connection, white for neutral, and green for ground. To properly convert it to 240V you would need a cable that consists of black & red wires for the two 120V legs.

I'll be the first to admit I'm no certified Sparky, but wire relabeling is used in a number of situations fully in accordance with NEC. My understanding is that some of this is in NEC 200.7. It requires relabeling both ends, but I don't think there's any code violation with it. If what you're saying was true, wouldn't that mean any -2 NM (Romex) would be code incompatible with 240v loads? I don't think that's true.

Edit: here's a Sparky doing exactly that