#1 is great. #2 is fine if the group is happy. But #3 is bad: participants without subject matter guidance will feel lost. To avoid this, make sure you have enough workable projects for everyone ahead of the event. Work with the subject matter experts before the event to turn their problems into projects. See the section Cultivating Good Projects above to ensure there is a coherent question, that the necessary resources exist (. datasets), and that the skills needed for the project match the skills expected to be brought by other participants (and in sufficient quantity).