I would do a repair install - I have done this myself
I did option 2
This tutorial will show you how to do a repair install of Windows 11 by performing an in-place upgrade without losing anything. If you need to repair or create a new recovery partition or having problems with the Windows 11 operating system on your PC, and the usual solutions will not fix it...
www.elevenforum.com
it is good you are on 23H2 as you wouldn't be able to do that otherwise, as the copy of windows 11 has to match installed version.
You could try option 1, it wasn't there when I did it a few years ago.
all you might lose is windows updates, which you can get right after. It should keep everything else as is.