As far as I know, the CAA never invoke option (c).
Like Bose-x, I have previously let the medical revert to Class 2 after 6 months, and renewed it with an AME after 1 year, when my Class 2 privileges expired.
I understand it is now going to be 12 months Class 1 validity for under 60s, so it won't make any difference in future for me.