It should be option B, your MSI should have the same upgradecode as the original MSI which you released. The WIX bundle upgradecode has nothing to do with your MSI upgrade code.
The WIX bundle handles upgrades BOTH at the bundle level and also at the internal MSI level.
So when you go from v1.o wix bundle to v2.0, it will upgrade the MSI within as long as the MSI itself has the same upgrade code as the previous one.
CHeck this question which is similar but not the same scenario. WIX Burn Uninstallation?