The first. Long lingering after effects. For some they are fairly minor, but for many they seem to be quite tough, with significant problems doing any kind of physical activity.
At the moment it's all quite nebulous, with a lot of anecdote and not enough data. But there are some studies starting up that might start to untangle what's going on.
People experiencing long term symptoms? I can believe that, my tinnitus after covid-19 is still there, even if I don't notice it as much.
Actual viral infection? I really doubt that, thoug perhaps it could hide like the herpes virus.