For those who do hill intervals - what's your take on these 2 alternatives?
It depends on what you are trying to improve. If you want to do better at hills in general, then the second option of holding back and making all of your efforts close to your LT without going over it will get you the better results. If you only have hills that last 4 or 5 minutes, then go again as soon as you get back down and turn around.
If you want to use the hills to improve VO2MAX , then give yourself more rest between intervals and do each one as hard as you can. If your last two intervals don't reach your LT then stop, you've had enough for that day.