Both methods are acceptable but on this particular case I prefer the first one.
If you look at the way the second one is set up, you will notice the system is not "balanced". That is, the loop is not supported axially in the vertical runs, so it tends to fall and cause bending moments. Usually, it is good practice that all piping be well supported and balanced. Such that if you run a SUStained case check and look at the Deformed Shape, there shouldn't be any region where significant sagging occurs. This is a quick way to check that.
A reason why not to use #1 would be if you are dealing with high pressure piping. I usually stay away from welding dummy legs unto thick schedule piping.
But as always, it all depends on your particular situation and on available steel.