HoMM3 HD is a mod (add-on) for the game Heroes of Might and Magic 3.

The essence of the first option is that text files will work the same for both players? If so, I'm for the first option.

Regarding cheating with text files.
There was a case in an inter-portal tournament, one of the teams used a text file that changed the set of secondary skills offered when leveling up heroes, as a result, obviously useless skills were not offered to them.

But there are also useful text files. I use these myself:
1.Cranim.txt - battle animation accelerator.
2.ARRAYTXT.TXT - shows the number of neutral units as a numerical range (50-99, for example).
3.Objects.txt - prohibits the generation of objects that impoverish the game - hill forts and cartographers (their use is prohibited by the rules, so on a random map they are junk, and well-guarded at that), as well as keymaster tents and corresponding guardian pillars (due to the peculiarities of playing on random maps, the possibility of their practical use is negligible, which also makes them junk).