Your explanation numbered 1 is correct.
The control line indicates that the antibodies required to detect the SARS-CoV-2 (the virus that causes COVID-19) particles have reached that location on the test strip.
Each product is slightly different, but the Rapid Response package insert notes:
Anti-SARS-CoV-2 antibodies are immobilized on
the test region of the nitrocellulose membrane. Anti-SARS-CoV-2 antibodies conjugated to coloured
particles are immobilized on the conjugated pad. A sample is added to the extraction buffer which is
optimized to release the SARS-CoV-2 antigens from specimen.
During testing, the extracted antigens bind to anti-SARS-CoV-2 antibodies conjugated to coloured
particles. As the specimen migrates along the strip by capillary action and interacts with reagents on the
membrane, the complex will be captured by the anti-SARS-CoV-2 antibodies at the test region. Excess
coloured particles are captured at the internal control zone.
This image I made for Wikipedia many years ago explains how this works:
In this case, the SARS-CoV-2 nucleoprotein antigens are the green dots. Antibodies specific for the nucleoprotein antigens are attached to colorful gold dots. When you place the a sample with virus on the test strip, the antibodies with the gold bind to the virus. As it moves up the strip by capillary action, another part of the virus binds to the antibodies pictured here in black. The increased local concentration of gold particles is visible on the strip.
Antibodies with gold attached that are not captured by the black region reach the blue region, where the antibodies themselves are bound. Thus, the control line only ensures that antibodies from the space where you drop the test solution have reached a location further away than the SARS-CoV-2 specific region. It does not ensure any particular composition of the sample.
The package insert describes this:
A coloured band at the control region serves as a
procedural control, indicating that the proper volume of specimen has been added and membrane
wicking is working.