I disagree that option 1 is the right choice. It stated that Option 1 was faster and must therefore be the correct choice. However, option 1 lost a constraint that was part of the table in the first place. How could this be the correct choice?

There was nothing in the question the had any performance requirements for getting the fastest update with no concern for the integrity of future data. There was a notion of a large number of records. So, the last answer must be the correct one that either one is acceptable without further qualification.

My 2 Cents.