The second interpretation, to me at least, seems too broad to be reasonably applied. (Some groups might be just fine with it.) It also seems to overlook probable events in the books/rpg books that did not lead to Lawbreaker level consequences. It just strikes me that there are too many ways to abuse that interpretation against wizards, without adding any fun to the game.
My interpretation is based on the following ideas.
Free Will - This seems to be pretty important throughout. To break a Law requires an act of Free Will, that cannot be made by anyone else. Yes, you can be put into very bad circumstances, but taking away your Free Will is an act only monsters do (hence the Law against mind-magic). A lack of will may also lead to serious consequences, but doesn't seem to have the same metaphysical impact. (I'm not saying it doesn't affect a character to choose by not making a choice; just that it doesn't seem to work at the level of Lawbreaking.)
Intent - Again, this seems to be a common thread throughout the books. Magic is all about focusing your will, with a stated intent, to achieve a result. Lack of intent = lack of will = no magic, or at least no magical consequences. See Harry's statement in the rpgs re certain events involving probable human deaths that resulted from a casting. Harry did not intend for that result to happen; it wasn't the will and intent of the spell; so, although it's affected him, he didn't suffer a Lawbreaker result.
Add to this some corollaries
Reckless Disregard - If a wizard knowingly casts a spell that isn't necessarily intended to harm mortals, but doesn't take their presence into consideration, then he/she's shading into Lawbreaker territory. Key words are 'knowingly'. This is a grey area, that can quickly go to black.
Good Intentions Don't Count - At least, not in the metaphysical area. It can mitigate the legal consequences of your acts...but Harry is still a Lawbreaker, even though the alternative was dying and letting his 'mentor' get away with a much more serious violation of the Laws.
As always, your mileage may vary...