I am not a fan of pepper spray on dogs.
I am a fast rider and I can ride away from nearly any dog. And if I can't, I just reach down for my water bottle and spray water at them. Every dog I have seen, freaks out when it sees the blast of water and pulls up which gives me my chance to make good my escape.
Pepper spray would just be harder to reach and then point and then actually hit and because of its nastiness, I might get myself. I don't care if I get a little water on me.
I have tested option 2 for dogs, and that is stopping, dismounting and walking out of their territory. That has worked 100% of the time for me. Just keep the bike between you and the dog.
I don't think pepper spray would work well on motorists. Most here in Central FL have AC so that won't work. Most are passing you too fast to really be a viable target. And if they did see you pointing pepper spray at them, it would be an open invite to road rage which does not even bear thinking about. I have yet to meet a really toxic driver, but I think one of those would best be handled by just getting off the road. Motorists have short attention spans and will probably leave pretty quickly.