I went with option 1 in my shop but the footing is only about 4 1/2" high. I figure I lost a little vertical and gained a little floor space. I also ended up with an area under the cabinets that I use for seldom used item storage. at 8-plus inches you could line up a row of plastic bins to hold small items or stock items like bulk screws, jigs, etc.
Obviously the height needs to be adjusted so the tops are at an appropriate height so this robs you of interior height. The cutout gets you the interior height back if that is more important. In the end its your decision; if cabinet space is really important, take the time for the cutouts.
"A hen is only an egg's way of making another egg".
– Samuel Butler