What should I do about my passport situation when applying for a visa extension in Thailand during my upcoming travel?

No immigration offices would keep your passport during the whole under-consideration period. Jomtien sometimes keeps your passport to process the stamp, but it's up to a few days for when you get the extension (not the under-consideration stamp) if I remember right.

Option 1 would work for you, BUT, tell the IO about the plan of your travel abroad first before you really submit the documents. And make sure they are okay with you leaving Thailand for a short stay during the U/C period. Then AFTER they accept your application and you get the under-consideration stamp, buy a single-entry re-entry permit to keep your U/C stamp alive.

Option 2 might be an alternative, BUT, unfortunately, 1 and 2 August are national holidays, you only can apply for your next extension on 3 Aug.

Your current extension expires on 2 Aug and the office is closed due to a national holiday, so you can apply for a new yearly extension on 3 Aug as normal, oveerstay fine will be waived for that day. But you will get the stamp mentioning one day overstay. And in case your documents are not completed, you will be on overstaying until you submit everything.

Try option 1 first. Then you can have option 2 as a backup plan.