I believe (2) but not (1). I have never believed karma to be a westernized "what goes around comes around" concept. If you remove the words "justice" and "deserve" and then I might be able to say I believe in (1). As I discuss in my https://medium.com/channspirations/revisiting-karma-and-the-law-of-attraction-997965601b65, I had never been able to clearly articulate what I believed about karma, beyond that is it not a reward and punishment system and intention is what matters most, and then I saw this in DL Nemeril's https://medium.com/spirit-alchemy/your-soul-knows-why-youre-here-fab15a32045f:

"Here, we would like to add that we do not agree with karma meaning you have to ‘pay’ for what you did in another lifetime. That is a very human perception, of life being a court system meting out reward and punishment. Karma is a vibrational level that draws the experiences needed for healing and growth to a soul. Nothing more."

Mic Drop!!

My essay then discusses how I have always railed against the LoA. What works for some does not a law make and I especially cannot countenance how believers use it to blame and victim shame those that do not manifest their hearts desires or for bad things happening to them. Upon reading that simple definition of karma I realized that if there is a LoA it simply describes the vibrational pulls of our soul contracts, not what we humans consciously or subconsciously emit.

I should add that as with your view of karma, my view of soul contracts absolutely has much room for free will. I prefer calling them improv scripts. https://medium.com/illumination-curated/life-is-school-for-the-soul-9b081dbe8453