Basically, Version 1 creates a Firewall zone identical to LAN, and creates the appropriate rules to achieve the same functionality as the LAN zone. It also integrates the LAN interface into the new firewall zone, which I find strange, but I am not a Wireguard user so take that with a grain of salt.
Version 2 does not create a new zone identical to LAN, and I would assume integrates the WireGuard firewall into the LAN firewall zone. But you would need to provide additional configs to confirm this.