Using two ports on a SFP switch as media converter?
Option 3 is commonly referred to as a “Core Switch” and is used at almost any Marriott, Hilton, or Hyatt (and their related sub-brands) that was installed in the last 3 years and even longer. Having a DMZ VLAN is nothing unusual. It is used in the industry because it makes it easier for multiple devices to connect directly to the internet (versus having many LAN-side ports on a router) and can allow you to reroute traffic if a particular device (other than the core switch) goes down and you need to quickly provide a temporary solution.
EDIT: By the way you can also use VLANs so that you only need a single ethernet between the USG and the switch. This gives you more options in case in the future you want a server (maybe with VMs) to access both LANs.
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