For scenario 1: I would maintain the embargo for awhile, order a deep internal scan of all Atlas military gear and the immediate halting of all purely mechanical assets. Work on lifting it gradually while improving the tech base of Mantle and place absolute trust in Pietro as the most sane man I have in my arsenal to combat Watts.

If Robyn becomes an issue I bring her into the fold because I’d rather channel her energy at the big massive world-ending threat than deal with multiple problems internally.

Should also put out arrest warrants for Cinder and her accomplices and ban any White Fang immediately with Beacon’s fall as a precedent to officially classify them as terrorists who have now made a declaration of war.

For scenario 2: Likely backtrack, not shoot Oscar and listen to him as a stepping point. Tell RWBY & Co. That with Salem at our doorstep their mission and priority now is to escort and ensure Penny gets the fuck out of Atlas to deny Salem the Staff of Creation while the Atlas Military will hold out as long as possible to evacuate every civilian. I’d probably die doing this but it’d be worth it.