Hello there! Developer here!
It is definitely not the second one! MC's loved ones won't turn against him because of some penis.
Clara the childhood bestie is into BNWO (the only character into it in the game so far) and teases MC, calling her a white-boi etc. But that's all, she doesn't hate MC or outright bully MC.
The main story is the cuckolding with the girlfriend which will be as wholesome as possible. I don't think "MC loses out" is correct term, she will just win differently in the new relationship dynamic with Mr. Brown and Alexandra.
Hope this explains!
After actually going through the first week up till a few scenes into the party (and maybe meeting said girlfriend) it suddenly occurred to me I should have asked a few follow-ups - specifically regarding the "main story is the cuckolding with the girlfriend" bit; from the phrasing I assume there's no possibility of a route like in The Good Son (RIP
) where instead of cuckolding the MC's GF stays loyal (in the case of TGS quickly assuming the role of the top and gradually easing the MC into it) while encouraging their transformation?
Probably just my grief for said game getting in the way but from
The Nook Erotica 's post I was really hoping that might be a possibility here too
EDIT: "As wholesome as possible" also raises an eyebrow, since personally I feel the only way that can work is if it's entirely the cuck's idea to begin with (this applies to all cuckold/cuckquean dynamics IMO; "I feel can't give you what you deserve so feel free to fuck other people" can be wholesome AF but "you can't give me what I need so I've decided our relationship hinges on you being okay with me fucking other people" is downright toxic no matter how gently the latter is delivered) - which in turn presents its own snarl in the sense that if the story has to go that way you have to pull a
ton of control over the MC out of players' hands, an especially big deal in the feminization genre where a major source of the appeal is
having control over shaping the MC's mind (and by extension body)
Again, I've barely gotten into the game so this is largely a vibes-based rant and I could be way the hell off... in fact I do genuinely hope I'll later feel dumb about this post